- Accounts submitted to HMRC & Companies House
Tax structures explained
There are two things that people consider when deciding what structure to use for the business
– Legal protection
|Own name||Limited Liability
|Tax rates||20%, 40%, 45%%||20%, 40%, 45%%||19%|
This table outlines the fact that tax efficiency only c0mes from limited companies. Owning a business/investment in a Limited Liability Partnership only gives you legal protection. This is because the LLP profits are taxed in the hands of each member at income tax rates.
The only structure that provides no legal protection is where you have business/investment activities in your name. Using a Limited Liability Partnership (LLP) or a Limited Company (LTD) will provide you with legal protection.
Your personal home is at risk if your trade/business activities are in your own name if someone sues you. Unlikely for buy to hold properties. You could put insurances in place, but a limited company would minimise the assets that may be taken if someone did sue you