Thoughts? Proposed corporation tax rates and NI Class 4 increase make incorporation appealing, although dividends going down to £2000 isn't welcoming. Seems like a budget to get as much NI as possible from businesses.
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Johnny - Owner of an overly-active keyboard.
A man who can read, yet doesn't, is in no way wiser than a man who can't.
The new NI Class 4 rates should not effect businesses with profits of around 20,000 - 25,000 to much because of the abolishment of Class 2 NI, however for higher profit businesses then incorporation must now become a thing to consider but the reduction of the dividend allowance is another element to think about.
Most of my clients are sole traders and at the lower end of the profit scale so I can not see any of them rushing to incorporate just yet, just my thoughts after only having a quick look at the main Budget points.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
On a clear profit of £25k and then taking a salary of £8164 for the Company Shareholder/Director, I calculate that the S/D will be £700 better off than the self employed bod, so I would have thought that's the minimum level to incorporate for tax purposes. Probably nearer 30k to make it remotely worthwhile.
When CT drops to 17% it maybe worth revisiting.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
