Company Formation

If you're looking for a UK Company Formation service we recommend using Simple Formations. Straight forward advice and no hidden fees.

Increase in company formations

Following the increase of a 50% top rate of tax it is expected that some high earners will move to form a limited company.

The current threshold for a company with less than £300,000 profit per year is 21%. This may provide an opportunity for individuals earning over £150,000 per annum to ‘sit on’ the money until they want to withdraw the funds from the company.

It is already common practice for some contractors and freelance workers to operate through their own service company. Whilst some people will manage their finances through an ‘umbrella company’ it is becoming widely understood that you can manage your own company with a little assistance from an accountant and save thousands of pounds each year. This also avoids paying umbrella companies for their services.

One of the countries leading formation agents Simple Formations has reported that they have seen significant increases in private service companies. They also suggest that ‘contractors and consultants do not need umbrella companies. With a little knowledge of filing accounts and tax returns people can simply run their own limited companies.’

If you do not need to withdraw all of your earned income each year or you do not currently run your on service company then this may be an option for you. An accountant should be able to review you personal circumstances relating to service companies.

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