Limited company benefits are many and include many different things that your business needs to succeed. These are just some of the best benefits of limited company structures, and why the number of single employee limited company businesses has risen by more than 70,000 over a year ago: Greater claim flexibility and planning options. Claim expenses at source. Opportunity to reclaim VAT on some purchases. And the best part is, all this can be done from the comfort of your own office or home.
As mentioned, one of the most effective limited company benefits is the ability to claim depreciation and tax costs on all your working capital including equipment and materials used in your business operations. One of the other great advantages is the tax planning benefit where you can take advantage of company-provided depreciated labour costs and capital expenses and use it to reduce your taxable income. If you’re a skilled specialist, you may want to include some of these limited company benefits in your annual returns to limit your company liability.
Another one of the limited company benefits is the ability to take home pay. Umbrella companies offer you both an investment and an opportunity to take home pay through their benefits and investment schemes. So whether you need an extra cash advance during a tough period or you’re looking for a suitable way of repaying outstanding bills, you can do it through an umbrella company that offers you attractive tax efficient options.
It is also very easy to incorporate limited company benefits that enhance your personal wealth as well as the wealth of your business. For example, you can take advantage of directors’ benefits to help you with your retirement. You can also take advantage of directors’ options to buy-in the new company for a fixed share of the company stock. Or, if you wish, you can receive a lump sum and establish a new board of directors at a cost-effective share price.
Limited company benefits also provide business owners with the flexibility to control their liabilities and assets. The maximum liability limits are 15% of the total value of all shares and assets. At the same time, there are no restrictions on the size of the business or the number of partners. In other words, there’s no need to put together a management team if you have an investment property that has numerous partners. You can set your own limits and fees for meeting these limits. This gives you, the shareholder, more power over the business operations and increases your personal liability protection.
Limited company benefits can also facilitate greater control over finances. Through the EFRBS, members have the right to invest in an unlimited number of stocks and shares and can make a wide range of decisions on those investments. Because of this greater control over finances, the ability to avoid any large tax obligations is enhanced. The EFRBS also allows tax savings for the business owners because dividends are not required for tax reporting purposes. As with other types of pension schemes, the EFRBS provides a great opportunity to save money by investing in a tax-efficient enterprise.
Another major limited company benefits come in the form of dividend payments. The EFRBS allows limited company owners to receive regular dividends according to their own personal investment plans. The rate of dividends may vary according to the government rate schedule or the mutual funds rate schedule published by the fund’s manager. A number of investment options are available to the limited company directors. The dividend payments are usually made monthly. This monthly payment can either be a distribution or an annual dividend depending on the arrangement between the employer scheme and the limited company director.
One other limited company benefits come in the form of the tax-free and non-taxable dividends. If a shareholder is a non-domiciled citizen, he or she will be able to avoid paying any tax on dividends. In addition, if dividends are invested in a registered fund, then they will not be taxed. Even if dividends are paid to an offshore account they will not be taxable as long as the money is kept in that account and not taken home.
danstheman
Dan Lewis is a business and finance consultant who stared is career with Capital One and worked as a business and finance analyst for over 25 before leaving the corporate world to create this blog.