Incorporation protects your personal assets and can produce tax savings.

Whether your business is a start-up or a long standing firm, you may wish to consider trading through a Limited Company in order to protect your personal assets from liability should the worst happen, and it could save you tax as well.

The benefits of a Limited Company include:

  • Limited Liability – Should things go wrong, your liability can be limited to the amount that you have paid for your shares.
  • Spouse/family Income – If your spouse also is a shareholder and director then the profit can be extracted using their tax allowances, reducing the overall tax on the business profits.
  • The company is a separate legal entity, so continues after the death of the owner – useful for IHT planning. This is aided by the ease with which shares can be transferred.
  • Many clients, especially big corporates, will be more inclined to do business with limited companies
  • Profit Extraction – A Limited Company gives you options of how and when you take the profits out of the company. If you are a higher rate taxpayer then it may be possible to effectively defer the payment of some of your tax by leaving the profits in the company until a time when extraction can be made at a more favourable rate. Once Corporation Tax is paid on the profits of the company (currently at 20%) then extracting the profits via dividends result in less tax than by taking a salary.

Incorporation results in additional administrative requirements which can lead to increased costs, so it is worth discussing with your tax advisor whether a limited company is right for your business.

If you would like to discuss how our incorporation services can benefit your business, please email customerservice@taxinnovations.com or call us on 01962 856 990.