P Adams
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Will I pay less tax if my partnership incorporates?

Will I pay less tax if my partnership...

Can anyone help me with definitive advice on whether my consultancy partnership should incorporate to significantly reduce our tax burden?  Successive accountants have told me that it is "swings and roundabouts" and that overall our tax position would not change much from our current partnership to a limited company.  But when I have asked for a detailed comparison to prove this I am quoted a lot of money and reluctance to actually undertake one.

There must be a cost effective way of finding out one way or the other.  If you can help me please let me know.

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27th May 2010 09:49

Not a straightforward question

One of the main points to consider is whether the partners drive around in expensive polluting cars. this will have a significant impact on the answer about whether to incorporate or not, as they will be puished severely by a corporate structure. In order to show deinitively though you have to make a whole raft of assumptions about the running costs, real depreciation rates etc.

This might indicate your current accountants reluctance to go into great detail when his experience tells him you're better stopping as you are. Of course there are accountants who would quote you a fixed fee of £750 for a report when they already know the outcome.

 

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27th May 2010 13:06

How much detail do you want?

If your in or around Manchester give us a call, if not find a local firm who will run your circumstances through a spreadsheet and discuss the issues with you.

 

 

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By Anonymous
27th May 2010 13:57

not unreasonable

So "successive accountants" have told you that it is "swings and roundabouts" and you want one of them to undertake the work (which is not inconsiderable) to prove this statement to you. You are however not willing to pay them for doing so.

It would be most interesting to know what sort of consulting work you do and whether you would be happy to do some for me for no fee.

I think that your "successive accountants" are acting in a proper commercial manner.

But I agree that the answer to your question is that it depends....on many factors

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By P Adams
27th May 2010 15:55

your inference is incorrect

I never said I expected anything for free, so I dont know why you have jumped to this conclusion.  But given the tone of your anonymous response do rest assured that I would not come to you for any advice - free or otherwise.

To the other responders, thank you for your replies.

 

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