Introduction

The issue of whether to run your business as a company, a sole trade or a partnership continues to be very much a ‘hot topic’ of the moment. This is due to a combination of changes to the tax system over recent years. These have generally combined low rates of corporation tax with no national insurance on dividends. This has meant that many self employed businesses were transferred into companies to obtain tax savings. In March 2007 Gordon Brown held his last Budget and announced a series of changes to the tax system over the next three years.

In this briefing we summarise the relevant tax changes and examine whether it is still more attractive to continue to operate your business through a company rather than self employment.