Sole Trade, Company or Partnership?

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A Tips & Advice Special Report about...

In a nutshell

From 2023 running a business through a company purely for tax-saving reasons is unlikely to be the optimum option. In this Special Report we look at the impact of the forthcoming changes and help you prepare for them. We cover exactly what you need to know to make an informed decision on the future of your business.

In detail

If you operate a growing sole trader business you should consider your next steps very carefully. Existing small companies may wish to explore alternatives. In this Special Report, we use numerous detailed examples to show exactly why incorporation will no longer be the default option for a growing business. We also look at why remaining as a sole trader, or forming a partnership, may be more tax efficient.

Topics covered include:

• The attack on small company owners - changes 2016 to 2023
• Sole trade vs company now and next year
• Maximising your tax-free profit extraction if the company is still needed
• An introduction to partnership taxation
• Partnership vs company vs sole trade after 2023
• Disincorporation and anti-phoenixing rules

The war on company owners is real. The changes that are coming are unavoidable, but this Special Report will help you best prepare for them and take appropriate action ahead of April 2023.

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We've created this Tips & Advice Special Report especially for... 

Every business owner that wants to:

• Be familiar with the most tax-efficient option for their business
• Be fully prepared for the upcoming tax changes in 2023

Advisors that want to:

• Help their clients choose the right business type

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You'll get the following free extras with this Tips & Advice Special Report... 

An online service with ready-to-use documents

• To immediately apply our advice and solutions in practice
• That you can easily adapt to suit your own requirements

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In this Tips & Advice Special Report you'll read about...

1. The attack on small company owners - changes 2016 to 2023

1.1. What was the old position for incorporation?

1.2. What changed in 2016?

1.3. What happened between 2017 and 2022?

1.4. What about 2023?

1.5. Are any other changes planned?

2. Sole trader v company - before and after 2023

2.1. Are there still tax savings with incorporation?

2.2. What’s the position in a nutshell?

2.3. What are non-tax reasons for using a company?

2.4. Anything else to keep in mind?

2.5. What if I don’t need to extract all the profits each year?

2.6. Are there alternatives to leaving profits undrawn?

2.7. Will it be worth keeping the company if I can bring my spouse in as a second shareholder?

3. Partnership taxation

3.1. What is a partnership?

3.2. Are there different types of partnership?

3.3. Are these partnerships treated differently for tax purposes?

3.4. How are profits calculated for income tax purposes?

3.5. What if the partnership account period doesn’t coincide with the tax year?

3.6. What’s changed?

4. Partnership vs company vs sole trade after 2023

4.1. What’s best from 2023 onwards?

4.2. What’s the position at £60,000 profits?

4.3. What’s the position at £100,000 profits?

4.4. What’s the position at £175,000 profits?

4.5. What’s the position at £300,000 profits?

4.6. What’s the position at £500,000 profits?

5. Disincorporation and the anti-phoenixing rules

5.1. Is disincorporation worth considering?

5.2. What are the rules?

5.3. What is a TiS?

5.4. What are the TiS rules?

5.5. What was the first change to take effect from 6 April 2016?

5.6. What was the second change to take effect from 6 April 2016?

5.7. When will the TAAR apply?

6. How can efficiency be improved without disincorporation?

6.1. I don’t want to disincorporate - what can I do to maximise efficiency?

6.2. How can I take advantage of these savings tax breaks?

6.3. Does the company have to deduct tax from interest paid?

6.4. What tax-free benefits can my company pay for?

6.5. What about the exemption for mobile phones?

6.6. I already have a phone, can the company just pay my bill?

6.7. What about mileage allowances?

6.8. What are trivial benefits?

7. Appendices

7.1. Appendix 1 - Distributions in a winding up

7.2. Appendix 2 - Dividend checklist

8. Documents

8.1. Dividend voucher

8.2. Distributable profits paperwork

8.3. Dividend waiver

8.4. Director’s loan account record

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You can choose from the following options...

Paper

• The hard copy version
• Keep it on your desk or use it whenever you're offline

Digital

• The PDF-version
• Delivered to your inbox

Take a look at your options below.