Incorporation or not?

Incorporation or not?

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I am wondering at what level of profits do you tell your clients to consider incorporating?

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By MBK
23rd Jan 2014 13:06

We reckon ....

... generally speaking it's worth it if profits are >£20k pa

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By annettedwyer
23rd Jan 2014 13:26

I'd say..

£25k - £30k...

 

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By Maslins
23rd Jan 2014 14:04

I tend to say profit £30k+

I tend to say profit £30k+ and expecting to be in business at least 2 years.

Sure, there are still tax savings from a lower profit level, even after accounting for increased accountancy fees...but it's a lot more of an admin burden, especially if the business closes shortly after.

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By Vaughan Blake1
23rd Jan 2014 14:40

I'd say, it depends on many things...

risk factor of trade (Ltd liability can literally be priceless)

Travel expenses & car choice

IR35 exposure (oops own goal)

National insurance payer or pensioner

Other income levels/need to draw on company profits.

Business premises

Extra fees, hassle & restrictions that comes with a company

s455 issues

existence of goodwill and commencment date of business

pension arrangments

expected life of the business/possible sale

succession planning

Beware the tax tail wagging the commercial dog!

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