Using a Company to Save Tax 2018/19

Publication date: November 2018

Using a company could save you over £10,000 in tax every year... possibly much more.

Why? Because a company paying tax at 19% (17% in 2020) will have a lot more money left over to reinvest and grow than a sole trader or partnership paying tax at 42% or 47%.

However, company owners also have to pay income tax when they extract money from their companies (typically as dividends) and the bad news here is that dividend tax rates were increased significantly in 2016.

This means companies no longer deliver guaranteed tax savings and the decision to incorporate has become a lot more complex.

This plain English tax guide tells you everything you need to know about the tax benefits of running your business through a company and contains numerous examples and tax-planning tips.

It 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.

Subjects covered include:

• All relevant tax changes from the November 2018 Budget.
• A plain English guide to how companies are taxed.
• The benefits and drawbacks of using a company – tax and non-tax.
• The exact tax savings YOU could enjoy by using a company.
• When using a company will result in a higher tax bill.
• How your spouse/partner can help you save more tax.
• The advantages and disadvantages of using more than one company.
• Why company owners who reinvest profits can save literally tens of thousands of pounds in tax.
• How to pay just 10% capital gains tax when you sell or wind up your company... plus new anti-avoidance rules.
• How to put an existing business into a company.

The guide also examines a variety of other important tax issues facing company owners, including:

• Pension contributions
• Motoring expenses
• Tax treatment of losses
• Selling or winding up the business
• Business property
• Borrowing money