Accountancy Blog

Sole trader to Limited company the pros and cons

What to expect from incorporating your business.

With a new tax year upon us, many sole traders will be reviewing their business structure and considering whether it’s worth switching to a limited company.

There’s no denying that incorporating a business proved popular in 2017, with Companies House reporting a 7% rise in the number of actively trading companies – bringing the UK total to 1.9 million.

Last year’s statistics also showed this trend is no flash in the pan as the number of actively trading companies increased by around 610,000 since 2010.

If you’re a sole trader who has weighed up the pros and cons and decided to form a limited company, here’s what you need to know to complete the transition. More…

Phoenix wings are clipped

A guide to measures which discourage ‘phoenixing’ of companies.

Companies can fail for several reasons and, for the most part, these aren’t the result of wrongdoing by the directors. For this reason, it’s perfectly legal to start a new company after an old one has become insolvent.

However, there are a number of rules that surround carrying on a similar business through a new company after the original company has gone into insolvency.

Known as ‘phoenixing’, this practice transfers the business, but not the debts, of the insolvent company to a new company.

But what is the problem with phoenixing, and what does the law say about it? More…

GDPR – ready or not here it comes

Small businesses are worryingly underprepared with little over a month to go before new data protection regulations are introduced.

The Federation of Small Businesses (FSB) claims 33% of SMEs have not started preparing for the EU-wide General Data Protection Regulation, which takes effect on 25 May 2018.

A similar number (35%) have only recently started preparing for it, with 52% of those approaching the Information Commissioner’s Office (ICO) for advice.

Only 8% of 934 small businesses polled by the FSB are ready to be fully compliant with the introduction of the GDPR. More…

Apprentices welcomed

Small firms in England are positive about the value that apprenticeships bring to their workforce, a year after the apprenticeship levy was introduced in April 2017.

According to a study by the Association of Accounting Technicians (AAT), the overwhelming majority of small business owners (96%) say they are likely to take on more apprentices in the next two years.

Most agreed on the advantages of taking on an apprentice, as 97% said it had been good value for money. More…

Tax simplification or pipe dreams?

The tax system in Britain should be replaced with a single rate on all forms of income, claims a thinktank.

A report by the Institute for Public Policy Research (IPPR) has outlined its recommendations to improve the British tax system.

In order to make the system more “progressive and efficient”, the proposed reforms would involve two elements.

Firstly, it would combine all rates and allowances for employee national insurance contributions and income tax in a single tax schedule, which would apply to all incomes on an annual basis. More…

The self-employed march on

The number of people who are planning to become their own boss has almost doubled in the past year, according to research.

Aldermore polled 2,003 adults and found that 29% aim to start their own business in the future – up from 15% in 2017.

Some 18% of those intend to make the switch in the next 12 months, while 28% believe they will give up full-time work to become their own boss within three years. More…