Leadership race means more tax uncertainty for owner managers
How is the scramble to replace the Prime Minister causing uncertainty for small company owners?
The main rate of corporation tax is currently due to increase to 25% from April 2023. This, coupled with the increase in the NI and dividend tax rates, has eroded the tax benefits of small business incorporation considerably. As a result, many small company owners have been considering their options, including bringing in a spouse or civil partner as a second shareholder, or disincorporating to transfer the business to a sole trade or partnership.
However, the position is now unclear. Several of the leadership candidates have made tax-related pledges, including scrapping the forthcoming rise, reversing the NI rate hike, and even cutting corporation tax. As a result, our advice is to delay making any decision on whether to disincorporate etc. until the leadership contest is over. The position should then become clearer relatively quickly. This is especially true if disincorporating would trigger tax charges.
Related Topics
-
Uber loses VAT margin scheme appeal
The Court of Appeal has ruled that Uber cannot use the Tour Operators Margin Scheme (TOMS) when accounting for VAT on its ride-hailing services. The decision could have significant implications for businesses that act as intermediaries when supplying services to consumers. What was the dispute about?
-
Investment bond - undercover tax trap?
Inheritance tax is a hot topic but most couples only need to be concerned if they are worth more than £1m. What you don’t hear about is the income tax charge on investment bonds that’s payable on death. Can you reduce the tax bill before it’s too late?
-
When are staff discounts tax efficient?
This website uses both its own and third-party cookies to analyze our services and navigation on our website in order to improve its contents (analytical purposes: measure visits and sources of web traffic). The legal basis is the consent of the user, except in the case of basic cookies, which are essential to navigate this website.