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
-
CT61
-
How to apportion advisory mileage rates for EVs
In September, HMRC introduced a new two-tier advisory mileage rate for employees charging electric vehicles. The rate differs depending on whether the vehicle is charged at home or not. But what’s the correct approach if an employee does both?
-
Can flipping properties create unwelcome tax bill?
You’re planning to purchase a cheap property, refurbish it and eventually sell it on for a hefty profit. You’ve been told that as long as you live in the property, the gain is tax free, is this correct?