Incorporate or not

From what point of view? If you need to ask, the answer is probably No.

Is all the overhead of incorporation beneficial in any way?

Regards

Limitation of liability?

any tax benefits?

A: Because you can't tell what's what.

Overheads are not usually beneficial in any way. Incorporation itself may be beneficial, and so I guess you meant "do the benefits outweigh the overheads?".

Limiting liability is usually a pretty good benefit, but overrated, as typically you should be getting insurance to cover that. There are potential tax benefits compared to operating as a sole trader, but they have been virtually wiped out by the last budget. In any case, as an IT contractor, chances are you'd be caught by IR35, so it wouldn't have worked anyway, even before the budget.

Q: Why is top-posting daft?

some, what type of IT business start-up are you?

tim

Although, of course, IR35 is not targetted at IT contractors, since that would be illegal :-)

Neil

"Ronald Raygun" wrote

Care to expand on this statement? [I thought the benefits had been merely reduced a little, rather than being "wiped out"?]

Not if you are the only employee/professional. Buy insurance instead.

Incorporation may be tax-efficient if you are working and physically present in other countries besides Britain. Google "IR35" to see why it is no longer a tax-saving measure domestically. Unless, perhaps, capital is a major element of your provision of services. Or you have several employees.

OK, so I was exaggerating a little.

But it depends on what point of the profit range you're at. The worst wipe-out is the point at which pre-salary earnings are £10k plus the personal allowance, where a sole trader would be paying 30% of £10k minus 12% of the starting rate band. Using last year's figures (£4615, £1960), IT+NI4 on earnings of £14615 would be £2765 (forget NI2), while the old-style company regime would involve zero tax, and the new one £1597. So more than half the benefit is wiped out. Of course the closer you get to the £50k profit end, the reduction of the benefits can indeed be described as "a little" tapering away to nothing as you get there.