ltd_companies

No doubt you will have heard many stories about people working
through their own companies, or paying into offshore companies and saving
themselves thousands in tax. Now with the recent introduction of the IR35, the
stories are even wilder - some stating that this has cause the end of the benefits
of running a Limited Company, others stating it makes no difference.

So how to know which avenue to take when entering the UK workforce? Check out the facts!

Corporate Tax

A lot of talk has gone on about contractors and Corporate Tax over the last year, particularly over
the introduction of IR35. If you are a Limited Company Contractor and you display the characteristics
of a self-employed individual (as outlined in IR56), then you may continue to receive all the benefits a
Ltd Company has to offer.

For commonly asked questions on IR35 click here.

Rates Financial Year

Rates	Financial Year
	2002	2001	2000	1999
Full Rate	30%	30%	30%	30%
Medium companys' rate	20%	20%	20%	20%
Where profits less than	£300,000	£300,000	£300,000	£300,000
Marginal relief on profits up to	£1,500,000	£1,500,000	£1,500,000	£1,500,000
Marginal relief fraction	1/40	1/40	1/40	1/40
Advance corporation tax *	N/A	N/A	N/A	1/4
Small Companys' rate **	10%	10%	10%	N/A
Marginal relief on profits between £10,000 - £50,000	1/40	1/40	1/40	N/A
Notes: * ACT is abolished with effect from 6th April 1999.
** Small companys rate on profits below £10,000

For 2001, starting rate of 10% is on profits up to £10,000, marginal relief on profits between £10,001
and £50,000, 20% on profits between £50,001 and £300,000.

Companies make their tax returns under the new self-assessment rules for accounting
periods ending on or after 1st July 1999. Large companies (with taxable profits over £1,500,000)
pay corporation tax by quarterly instalments.

Last reviewed on 8th March 2001. This information may not reflect changes
made to legislation after this date.

Aside from a lower tax bracket of 10% for the first £10,000, companies may also
claim expenses approximately to £5,000 per annum - including travel allowances
and tax-free training. For specialist advice on whether you think working
through a limited company is the better options for you - search our
Directory or ask our resident expert by sending an email to:
corptax@UKDiscovered.com.

TAX DEDUCTIONS ALLOWABLE