Incorporation.

BIG WAL

It looks like it will be advantageous for a sole trader client to incorporate. The present year end is 31st October.

Not having done this before, my question is about timing - when is the best time to make the change ?

deanshepherd

Good question, and one that will vary in each case.

Sometimes if the tax saving is going to be large and imminent then it can be better to incorporate as soon as possible.

For simplicity, you may wish to wait until the end of the current tax year. This will keep the final SE period for personal tax straight forward, avoid any overlap and keep the company in an accounting period co-terminus with Finance Acts.

If they are VAT registered you may wish to run until the next VAT quarter.

If they are going to make a loss, or have significant overlap profits to utilise on cessation, then you may wish to consider when you want this to crystallise.

It also depends on the quality of the clients records and their ability to make the jump from SE to company. Is it something that they can cope with quickly or do they need hand-holding for a while.

Just some thoughts to get you started..!