ICAEW.com works better with JavaScript enabled.

Continue reading

Q: Should a client delay incorporating his business due to forthcoming CT changes?

Q: My client is thinking of incorporating his sole trade business. I am aware there are changes to the amortisation of goodwill due to be implicated on the 01 April 2019. Would it be a good idea to delay the incorporation until the changes come in?

A: You are correct that HMRC are reinstating corporation tax relief for goodwill purchased by a company after the 01 April 2019. The new rules will give a fixed rate of 6.5% as a corporation tax deduction. Unfortunately the new rules do not apply to internally-generated goodwill acquired from a related party on incorporation, so even if you delay the incorporation your client will not be able to take advantage of the new rules.