Using a Company to Save Tax 2016/17

Using a company could save you over £10,000 in tax every year... possibly much more than this. Why? Because the corporation tax rate is much lower than the top income tax rates and will be cut further in the near future. A company paying tax at 20% or less 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 on 6th April 2016. This means that 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.