Small Business Tax Structures

In the formation of a company, consideration of structure is important. Trading as an incorporated or an unincorporated business can impact on various things.

Perhaps you want to be a sole trader, partnership, limited company or limited liability company – whatever you choose has its positives and negatives.

Several factors will govern the decision of your business’ structure – and tax is one of them. It is a cost like any other and should be cut using every legal means possible. Tax-efficient structures are an essential way to reduce your overall liability.

Reducing what you pay will have the effect of increasing your cash flow, improving your return on investment as well as increasing the value of your company. Having more cash means you can invest in your company to grow it, or you can take it for your personal use.

income tax

Business Legal Structure Set Up

There are several ways to structure your business. The most important being what type of structure will be acceptable to your clients. The more complex your firm and the larger the turnover/profit, the greater the opportunity to look at different  structures to reduce your overall taxation position. Clearly, there are many commercial implications which should inform your final decision on structuring your organistion.

Finance Equation can help you with the decision about the type of ownership to use for the activities you intend to carry out.

In our analysis we look at income, capital gains, inheritance and limited company tax and how the various implications can impact on you.

If you are a property investor and pay tax at 40% or above, then buying a further residential property in a limited company would be an efficient business structure for you as you will get full relief on interest payments. You may also want to look at ways to incorporate your existing properties to reduce your overall liabilities.

When looking at the different types of structures to what you have to pay out, it’s important not to fall foul of the General Anti-Abuse Rule, GAAR, introduced in 2013. This rule is designed to stop abusive arrangements and avoidance schemes where the primary purpose of the transaction is not to pay tax. Our accountants will provide you with HMRC compliant solutions to help you reduce your liabilities.


Our Business Accounting Services | What We Do For You

At Finance Equation we understand that at times the way you operate your business may change. This can also impact on operating structures. Using our expertise you can ensure any change in structure reflects your commercial requirements but is also efficient.

The many structuring options these will include, limited company(ies), company groups, trading as a sole trader, partnership, and partnerships limited by liability.

If you need support and advice on how to make changes to for example, become a become a limited company, how to register it, and ensure it is on the registrar of companies, then contact one of our specialist accountants, today.

If you are worried about your overall position, our experts can help you navigate the maze to structure your business in the most cost efficient way.

If you are changing or starting a a new busines , we  help you to design the most efficient way to set up and manage it.

Even a few simple changes can help your profitability and protect your financial future. Finance Equation is regulated by the ACCA and is equipped to deal with your financial needs.