I was on a course yesterday called “Small company reporting requirements”.
The amount of red tape and paperwork that even a small limited company needs to keep up with can be mind-boggling.
Now that the tax savings from being a limited company are not so significant, many smaller businesses (with profits under £50,000 per year) may decide not to become limited companies, to avoid the extra admin and red-tape.
If you’re a small business owner, a discussion with your accountant may help you choose which is the best course for you:
– Stay unincorporated and reduce the red-tape burden, but pay more tax
– Become a limited company, and pay less tax and have the protection of limited liability, but have more paperwork and reporting to keep up to speed with.
For example, we have several smaller clients who have chosen not to be companies, because they’ve got young families and want to have as much time as possible to spend with their children.
It’s all about what works best for you – but if you have a limited company, be sure to take advice from your accountant and make sure you are doing your best to keep up to date with all the required paperwork.
Doing it all in a rush after the year-end is not a good idea!
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