When to incorporate

Hopefully most people reading this have already downloaded my free app and had a chance to explore its functions. If not you really should go to the apple or android store and do so. One of my favourite functions in the app is the ‘should I incorporate’ calculator. As I get asked this all the time.

Although this is a very powerful tool it is really only a quick calculation and it is a good idea to use this as a starting to point for a discussion, for example if you are self employed with a car run by the business the treatment will not be so beneficial in a company. On the other hand it may be possible when you set up a company to bring goodwill in and effectively have the value of this available to be drawn down free of tax.

Another consideration is the timing of the incorporation. If a business invests in capital equipment then the value of this can usually be claimed against tax with up to £250,000 available per year at 100%, however this is not available in the final year of a business and so the relief is lost if you incorporate at the end of that tax year. The solution is simple enough, trade for a further short period, even a month before incorporating.

I hope you enjoy the tool and find it useful. Should you wish to discuss any of this give me a call on 07846 378028 or send me an email, James@jamescoward.com

App for business owners now launched

Over the years of meeting with business owners there are some queries which come up regularly, thanks to modern technology I have been able to the solutions of these together in a free to download smart phone app.

As well as ‘solutions for you’ (articles written by me to help with problems you may have), news, key dates and tax tables, the app contains 12 calculators designed to help with problems such as whether a sole trader would save money by incorporating, or how much a company car would cost in tax.

My hope is that the app will help me work closer with the business owners I am trying to help. Please download it for free and leave any feed back you may have about it. Feel free to pass it on.

It is in the apple and android store as James Coward ACA, or follow the links below.



HMRC to start issuing advance payment notices

HMRC new powers to ask for payment at the start of an enquiry are coming into force .These measures  appear to be designed to put people off using avoidance arrangements even where they are within the terms of the legislation.

Where HMRC believes a scheme has been used to avoid tax they can now issue an advance payment notice (APN) once they have started an enquiry, but before they have proved that an arrangement involves an unfair tax advantage.

The notice can be issued once the following conditions have been met:

HMRC must have launched an enquiry

  1. There must be a tax advantage arising from using the scheme
  2. HMRC has notified you that it believes that the scheme you have used involves tax avoidance

If issued with an APN you are able to appeal within 90 days but only if you believe one of the three conditions listed above has not been met. You also have the right to ask to pay the tax by instalments where the payment would lead to hardship.