Is a limited company for you?
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By :
Tom Jui
Submitted
2010-02-06 02:17:33 |
Anyone can set up a limited company as long as they comply with the many rules that have been laid out. Many people start up limited companies as there are advantages to becoming a sole trader or partnership. One of the main advantages of a limited company used to be the fact that a company would pay Corporation tax on their taxable profits rather than the income tax paid by a sole trader. As the rates of Corporation tax were lower than income tax, the limited company used to benefit. However, this has changed now in the favour of a sole trader. There are many other benefits for a limited company such as a wide range of allowances and tax deductible costs that are offset against the profits of a company.
As a shareholder of a limited company can receive a large part of his salary in dividends this is a huge benefit as tax on dividends is much lower than under the rules of Pay As You Earn. When the new legislation, IR35, was introduced in the year 2000, receiving payment in this way was not always possible. Certain activities fall within the rules of the IR35 legislation and will be liable to tax and national insurance, although certain expenses are still allowed.
The rules and legislation of a limited company are complex and varied and many individuals setting up limited companies find themselves bogged down with rules and regulations, spending all their time keeping up with the necessary paperwork in order to comply with HMRC.
Here at Churchill Knight we provide an accountancy service which aims to reduce the burden of all the paperwork and help you to become as tax efficient as possible whilst staying within the legislation set out for you. We are here to make your life easier.
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Author Resource:-
The Article is written by churchill-knight.co.uk providing limited company and Limited Companies Services. Visit http://www.churchill-knight.co.uk for more information on churchill-knight.co.uk Products & Services___________________________Copyright information This article is free for reproduction but must be reproduced in its entirety, including live links & this copyright statement must be included. Visit churchill-knight.co.uk for more services!
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