The key points and highlights from Howard Weintrob’s presentation “Business Structure and Tax Efficiency”
In a Sole Trader business structure, potential savings between 40% tax rate and company tax rate of 20% if excess profit is retained.
Self-employment/partners can achieve significant NI savings.
It is quite popular to pay dividends to avoid NI but companies must generate a profit to pay dividends!
Limited Liability Partnership combines the benefits of being taxed personally but with limited liability protection.
For sole trader/partner, losses in the first 4 years of trading can be carried back to the last 3 years’ income and obtain a refund.
The Research and Development project must seek to achieve an advancement in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty and not simply an advancement in own state of knowledge or technology.
The expenses allowed for tax purposes are anything incurred WHOLLY and EXCLUSIVELY for the business and are of a revenue nature.
Enterprise Investment Scheme is a tax efficient way of investing into a company as investors obtains 30% tax relief but must be for less than 30% of share capital.
Howard’s presentation was part of TechStartHub Startup Masterclass: How to make sure you’re investment and exit ready held last November 8 at University College London – Roberts Building. The next masterclass, Expert Advice on Website Content Strategy, Analytics, and Community Building, will be held on November 28 at the Innovation Warehouse.
by: Cris Kerwin Pabuaya