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