The coalition government has generally received a warm reception for the tax changes announced in the Budget. Contractors have been particularly pleased to see the swift creation of the Office of Tax Simplification which will look into untangling the complexities of IR35 ‘disguised employment’ legislation and potentially replacing it with something simpler.
In a recent newspaper column, Crunch founder Darren Fell gave his views on why he thinks now is a great time to start a business in light of recent tax changes.
“Recent Government tax changes have meant investing in a business to sell later is much more attractive for micro-entrepreneurs,” he said. “For me, this makes it really attractive to build businesses in the UK. Not only is it an excellent place to set up a business, it now has one of the better capital gains rates in Europe, which should help stop the “brain drain of entrepreneurs.”
“Life should become easier for freelancers, contractors and independent consultants as well,” he added.
Darren’s views coincide with the recent revelation that the number of people forming Limited Companies has risen after a two year slump. During the financial year 2009/2010, Companies House reported a 10% rise in formations compared to the previous year. If Darren’s views are correct then the increase in Limited Company start-ups is likely to ascend still more.
Perhaps one contributing factor is the gradual realisation that setting up and running a Limited Company needn’t be as trying as it once was. Particularly if you run your account with Crunch!