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Key considerations for a VAT inspection
Preparing for a VAT inspection? Price Bailey's article written by Greg Mayne offers some useful reminders and key considerations.
Every business is different, but here's what could work for you
The optimum structure for your company can be affected by a wide range of factors and each enterprise will be suited to different structures.
But in simple terms, in the majority of cases you are probably best off as a company.
For example, a husband and wife can quite legitimately earn between them £40,000 from their own company without paying any personal tax.
How? Each takes around £9,000 salary which doesn’t incur any NI or income tax. They then pay themselves interest on their capital of £1,000 tax free and the first £5000 comes through as their savings allowance. Add to that a £5000 dividend and they have a joint income of £40,000, tax free.
So if you have a business earning that sort of money we would advise that you put it in a company. If you’re earning more than that and consuming it, there’s no harm being in a company.
And if you’re earning lots more than that and retaining it in your business then it’s definitely an advantage to be a company. If you’re earning less than that then you probably wouldn’t be able to afford the compliance costs.
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Preparing for a VAT inspection? Price Bailey's article written by Greg Mayne offers some useful reminders and key considerations.
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