Company formations tumble as new tax bites
Company incorporations have dropped off markedly since Gordon Brown introduced a 19% dividend tax on profits in the 17 March Budget.
Figures from Companies House show a drop of almost a fifth to 25,308 in the number of new companies formed in April compared to figures published last year.
The decline in incorporations provide the first evidence that the closure of a loophole which emerged after last year’s Budget introduction of a zero percent corporate tax rate is slowing the tide of company formations.
‘These businesses really can’t afford to damage their profits by incorporating and paying more tax,’ Kevin Walmsley, partner at Wilkins Kennedy told the FT.
‘By not incorporating though, the owners of these businesses could be exposing themselves to greater personal risk.’