Aren't there any other matters to consider in deciding whether to incorporate or not?

Higher administration costs to comply with company law, payroll and bookkeeping is one factor. Another issue is pension planning. Extracting profits out of company as dividends rather than salary means that there will be no "net relevant earnings" and therefore pension contributions can't be made. But advent of stakeholder pension plans has meant that contributions up to œ3,600 per year can be made without need for any earnings. If a person does not wish to transfer funds in existing plans into stakeholder because of high charges, there is a way out: best net relevant earnings (i.e. salary) in five consecutive years can be used for making contributions for next five years, even if there were no salaries in remainder four years. It is comforting to know that entitlement to basic state pension is not affected by taking a salary from company at level of a person's personal allowances i.e. œ4,615.

Furthermore, an individual may decide not to bother with pension plans and instead invest in ISA. Often, these can be more efficient than pensions but that's beside scope of this article. If that option is taken, no salary is necessary.

Another factor is business motoring. It might be tax advantageous for an unincorporated business that owns many cars not to incorporate because if these cars have some private use there will be benefits in kind taxed on users. These are generally higher than straight apportionment between private and business for all car running costs in case of sole traders.

The conclusion is that there can be considerable tax savings waiting sole trader who decides to go down road to incorporation. But, one needs to proceed with caution and careful planning. And don't forget biggest advantage of incorporation, which is Protection from Personal Liability. Incorporating is one of best ways to protect a business owner from personal liability. Shareholders of a company are generally not liable for obligations of company. Creditors of a company may seek payment from its assets, but not assets of shareholders. This means that business owners may engage in business without risking their homes or other personal property.

Thank you for taking time to read this Article. I hope you've found it useful. If you have, please drop me an email and let me know what you think.

You can email me at...

constantinesavva@accamail.com

Alternatively, you can visit our website at http://www.tax-accounting-london.info and read a series of other full length articles that present complete picture on a variety of interesting topics.

If you would like to know how to save tax and make sure that more of your hard earned cash stays with you to expand your business and increase your profits, we have a Free Special Report addressed to small businesses either starting up or already in business. This Exclusive Free Special Report is available automatically when you subscribe to our regular series of Free Newsletters on finance advice and tax planning by visiting our subscription area on our website www.tax-accounting- london.info. It is complied from real life situations dealing with small business tax affairs for over 10 years and it is loaded with down-to-earth advice and practical, understandable examples.

LEGAL NOTICE Whilst every care has been taken in preparation of this article, author cannot accept responsibility for any errors or omissions. Proper professional advice should be taken at all times.

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Don't get me wrong, I'm not condemning affiliate programs...my entire site is dedicated to topic. I just want you to know that some companies are starting to look at new methods of rewarding you for sending them customers. After all, you are a salesman for them. How many brick-and-mortar companies do you know of that will have a salesperson make a sale, pay them their commission, and then never pay them another cent for future business from that same customer?

Why should Internet be any different? It shouldn't...and program administrators are finally figuring that out.

There are many companies that will track visitor that came from your site, and credit you for sale even if they don't purchase something until next day, or week, or month. Others will make that visitor your lifetime customer. If they come back two years later and buy something, you will get a commission for that.

A good example of this is Ken Evoy's 5 Pillar Affiliate Program. If you sell one of your visitors a copy of his book: "Make Your Site Sell!"( http://www.sitesell.com/helpmakemy.html ), you will not only get a commission for that sale, you will also get a percentage of all future sales from that customer, no matter what product or service they purchase.

A new idea being offered by companies such as Vstore ( http://affiliatematch.com/vstore ), is to allow your visitors to buy products without ever leaving your site. This means that visitor has time to spend on YOUR site, and get to know what excellent content you have to offer, and to hopefully return to YOUR site for future purchases.

This concept allows you to sell products such as magazines, gifts, luggage, hats, cooking accessories from your site, without having to give up customer that you worked so hard to get.

Here is an example of power of this idea: I have a site that gives tips and hints for those hoping to become Microsoft Certified. An excellent product for me to sell from that site is books. Everyone studying for this certification will need books at some point or another to help them pass exams. They come to my site for information, and I sell them a couple of books while they are there. Does pretty well for me, but can I quit my day job? Not exactly. I get a great deal of traffic...highly targeted traffic at that.

I should be rich! I'm not. Problem is, they visit my site, I do my best to sell them on idea that they will need books to help them study for exams, then I send them off to Amazon, and they're gone. If I'm lucky, they might remember my site when they get ready for their next exam. But chances are that they will still have Amazon shipping box sitting on their desk, and will go directly to them to purchase additional books.

So what can you do about it? Look for programs that will compensate you for future sales, or give you credit for sale next day, or month after they first visited them from your site. Or, look for programs that allow you to sell products directly from your site, without visitor ever having to leave.