THE RELATIVE TAX benefits of a business becoming incorporated were discussed recently in the Finance Bill debates. Mark Hoban MP a chartered accountant referring to 'Incorporate Now!' by Simon Sweetman and Neil Hamper (Taxation 14 March pages 567 to 568) pointed out that in 1996-97 the difference between the tax on a net income of a taxpayer earning £42 000 as an unincorporated sole trader and the tax paid by an incorporated business was around £1 300 in favour of the incorporated business. By 2000-01 the difference was some £3 500. Where a trading income of £20 000 was concerned in 2000-01 there was a difference of about £2 000 in favour of the incorporated business; however now that under the Budget changes the starting rate for corporation tax has been extended to £10 000 an incorporated business would be...
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