{"id":752,"date":"2018-01-08T00:00:00","date_gmt":"2018-01-08T00:00:00","guid":{"rendered":"https:\/\/slacc.co.uk\/index.php\/sole-trader-or-incorporated\/"},"modified":"2018-01-08T00:00:00","modified_gmt":"2018-01-08T00:00:00","slug":"sole-trader-or-incorporated","status":"publish","type":"post","link":"https:\/\/slacc.co.uk\/index.php\/sole-trader-or-incorporated\/","title":{"rendered":"Sole trader or incorporated"},"content":{"rendered":"<p>From April 2018, the &pound;5,000 tax-free dividend allowance is reducing from &pound;5,000 to &pound;2,000.<\/p>\n<p>Does this mean that converting from self-employed to a limited company arrangement to save tax and NIC is no longer a viable option? Readers who have adopted this strategy will have likely seen a reduction in taxes due thus far, but the partial loss of the dividend allowance will reduce overall savings that can be made.<\/p>\n<p>However, in most cases benefits will continue to accrue albeit at a reduced rate, and if profits are retained in the company, rather than withdrawn as salary or dividends, these benefits could still be significant.<\/p>\n<ul>\n<li>A company paying tax at 19% on its taxable profits can retain 81% to improve reserves and fund investment.<\/li>\n<li>A sole trader or partnership, paying income tax at 40% or 45% can only retain at best 60% or 55% of taxable profits.<\/li>\n<li>Sole traders or partnerships who are taxed at the basic rate of 20% will still be required to pay additional NIC on their profits and will not be able to retain funds at the same rate as a company.<\/li>\n<\/ul>\n<p>Will be keeping an eye on the numbers for clients who have adopted this strategy and will discuss their options when we review their tax position during 2018.<\/p>\n<!-- -->","protected":false},"excerpt":{"rendered":"<p>From April 2018, the &pound;5,000 tax-free dividend allowance is reducing from &pound;5,000 to &pound;2,000. Does this mean that converting from self-employed to a limited company arrangement to save tax and NIC is no longer a viable option? Readers who have adopted this strategy will have likely seen a reduction in taxes due thus far, but [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[1],"tags":[],"class_list":["post-752","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/752","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=752"}],"version-history":[{"count":0,"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/752\/revisions"}],"wp:attachment":[{"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=752"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=752"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/slacc.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=752"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}