Incorporating part or all of your business can have many benefits for the business and for the family as a whole. We have dealt with numerous incorporations in the past and are able to advise and help you through the process of incorporating.
Benefits that can arise from incorporation include:
- Potential tax savings; as corporation tax is a lower rate than higher/additional rate income tax. This is particularly helpful where the company has significant borrowings.
- More effective income tax planning opportunities; as you can decide how much income you receive from the company in the year regardless of profit levels.
- Limited liability; this is useful for areas of diversification which carry higher levels of risk than normal farming activities.
- Ability to easily include the next generation of the family; either through being a director or a shareholder.
There are, of course, some downsides to incorporation, such as any money earned by the company now belongs to the company, unlike in sole trades/partnerships where it belongs to the proprietors.
When advising you on the appropriateness of incorporation for your business, we will cover the benefits and drawbacks of the structure to enable you to make an informed decision based on the facts and business and family needs.
Our services include:
- Estimation of tax and cash benefits from incorporation.
- Consideration of which assets to bring into the company.
- Advice on whether to retain a tranche of your business outside the company, for example incorporating contracting services and leaving normal farming activities in the existing sole trade or partnership.
- Liaising with your legal advisers to form the company and produce the necessary agreements.
- Liaising with HMRC on VAT and PAYE
- Creating a tax efficient structure, considering:
- Salary versus dividends
- Family and company tax planning
- Pension arrangements
- Borrowing requirements