Tax

As the tax year-end (5 April) approaches, now is the perfect time to review your finances and make sure you’re making the most of available tax reliefs. A few simple steps could help you save money and ensure your tax affairs are in the best possible shape.

For many small business owners, incorporating their business once made sense for tax efficiency and limited liability. However, with recent tax changes, some owner-managed businesses may now find that reverting to a sole trader or partnership structure is more beneficial. Disincorporation is not as straightforward as incorporation, and business owners must carefully consider the tax and legal implications. This article explores the key practicalities of disincorporating a business, providing insights and examples to help you navigate this complex decision.

For years, many small business owners have chosen to operate as limited companies because of the tax advantages. The ability to control when and how profits are withdrawn, combined with lower National Insurance contributions (NICs) on dividend payments, made incorporation an attractive option. However, with recent tax changes, it may no longer be the most efficient structure for all businesses.