By running your business through a limited company you stand to save tens of thousands of pounds in tax and national insurance every year. Why? To start with UK corporation tax rates are much lower than income tax rates. Secondly, company owners can pay themselves dividends, which are taxed much less heavily than other forms of income. Finally, setting up a company with your spouse allows you to split your income which almost always results in a lower tax bill. This tax guide tells you everything you need to know about the tax benefits of incorporation. It is important reading for: Anyone running an unincorporated business: sole traders and partnerships. Anyone about to start a business. Accountants who wish to advise their clients on the tax benefits of using a company. Like all Taxcafe guides Incorporate & Save Tax is written in jargon busting English and contains numerous examples and illustrations. Subjects covered include: Plain English guide to corporation tax. Clear explanation of the 2004 & 2005 Budget tax changes. Summary of company tax advantages and disadvantages. Detailed comparisons of income tax and corporation tax.
How company owners can avoid paying any national insurance. Plain English guide to how dividends are taxed. How dividends can be used to cut your tax bill by thousands of pounds. The mechanics of paying dividends and how to stay on the right side of the taxman. Detailed examples of overall tax savings enjoyed by company owners. How to split income with your spouse to achieve further tax savings. Traps to look out for when using your spouse. How businesses that reinvest some of their profits can save tens of thousands of pounds by using a company. How to incorporate an existing business, including how to make sure you pay zero capital gains tax, VAT, and stamp duty. Offshore tax planning The guide also contains many useful tables which show the exact tax savings enjoyed by company owners at every profit level. These tables take account of ALL taxes: income tax, corporation tax, national insurance etc.