TaxCorporate TaxSole traders uncertain over future tax liabilities

Sole traders uncertain over future tax liabilities

Advisers make urgent calls for Treasury to clarify plans on small business taxation

Sole traders have been left in the dark over their future tax charges,
advisers have claimed, because the
Treasury has
failed to clarify its plans for small business taxation.

The pre-Budget report left the door ajar for yet another shake-up in the
taxation of small business.

In the PBR the Treasury said it remained ‘concerned’ about the tax
incorporation of the self-employed and added that it would ‘continue to review’
how the system could be improved.

Mike Truman from Lexis Nexis, the publisher of the tax guide, told
the FT that
the continuing review of small company taxation was causing uncertainty for
owners, who were unsure if they should trade as companies or sole traders.

Sole
traders
can still save £4,000 a year on their tax bills despite
efforts to crack down in this area. By taking undue advantage of tax incentives
individuals can save by trading through a company and paying out the profit as
dividends.

Further reading:

Composites face £1bn tax doomsday

‘Positive response’ to dropping audit for FSA firms

Carousel fraud measure set to hand Treasury half a
billion

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