Leadership race means more tax uncertainty for owner managers
How is the scramble to replace the Prime Minister causing uncertainty for small company owners?
The main rate of corporation tax is currently due to increase to 25% from April 2023. This, coupled with the increase in the NI and dividend tax rates, has eroded the tax benefits of small business incorporation considerably. As a result, many small company owners have been considering their options, including bringing in a spouse or civil partner as a second shareholder, or disincorporating to transfer the business to a sole trade or partnership.
However, the position is now unclear. Several of the leadership candidates have made tax-related pledges, including scrapping the forthcoming rise, reversing the NI rate hike, and even cutting corporation tax. As a result, our advice is to delay making any decision on whether to disincorporate etc. until the leadership contest is over. The position should then become clearer relatively quickly. This is especially true if disincorporating would trigger tax charges.
Related Topics
-
Why is HMRC checking PVA more often?
Your business imports goods and accounts for VAT by applying postponed VAT accounting (PVA) on its returns. HMRC is scrutinising returns and issuing large assessments in some cases. What can you do to reduce the risk of getting it wrong?
-
HMRC text or scam? Check before you act
HMRC is contacting some taxpayers by text this week about overdue Self Assessment liabilities and is also sending updates about VAT registration applications. At the same time, it has expanded its guidance on spotting fake HMRC messages on social media. How can you tell whether a message is genuine?
-
Electronic VAT return and payment due