Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Burning Question

15 May 2002 / Mike Thexton
Issue: 3857 / Categories: Comment & Analysis , IR35
To be, or not to be … self-employed, that is the question, says MIKE THEXTON MA, FCA, ATII.

SINCE THE BUDGET cuts in corporation tax and the announcements of National Insurance contributions increases to come in 2003-04 there has been a great deal of comment about the advantages of incorporation. The problem is that even the tax side of this is very complicated. I tried to create a spreadsheet that would calculate the tax savings to be made at different levels of profit but found that it defeated my programming skills and produced some strange results. Then I realised that this is a marginal costing problem which I well recall from when I was doing PEII (which is what it was called in those days).

First things first

The first step is to define the points at which the tax rates change.

It is necessary to make some simplifying assumptions because the rates are so complicated. This model will work...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon