Sole Trade, Company or Partnership?

A Tips & Advice Special Report about...

In a nutshell

Since 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 changes and help you make the right choices. 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 is no longer 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
• Sole trade vs company
• Maximising your tax-free profit extraction if the company is still needed
• An introduction to partnership taxation
• Partnership vs company vs sole trade
• Disincorporation and anti-phoenixing rules

TThe war on company owners is real. This Special Report will help you take appropriate action that’s best for your business.

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

Advisors that want to:

• Help their clients choose the right business type

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

Downloadable ready-to-use document templates

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

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

1. The attack on small company owners - changes 2016 to 2024

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?

2. Sole trader v company - before and after the CT increase

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

4.1. What’s best going forward?

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 growing trend?

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. How do the TiS rules apply to changes of ownership?

5.6. How do the anti-avoidance rules apply to distributions during winding up?

5.7. When will the TAAR apply?

6. Improving tax efficiency for company owner managers?

6.1. How can I extract profit to maximise tax efficiency?

6.2. Is it tax efficient for my company to pay me interest?

6.3. What tax-free benefits can my company provide?

6.4. When does the exemption for mobile phones apply?

6.5. How does the exemption for mileage allowances work?

6.6. What are tax exempt 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

You can choose from the following options...

Digital

• The PDF-version
• Delivered to your inbox