The answer is that from a tax point of view, it is advantageous to trade through a limited company as long as income is drawn from company by owners as dividends from their shares and amount of dividends drawn is restricted below 40% band rate (i.e. œ31,063 for tax year 2002/03). That way, owners have no further personal tax ("income tax") to pay. Moreover, dividends are not subject to national insurance contributions. This is excellent news of course. But, if dividend income falls within higher rate bracket of income tax (i.e. above œ34,515), they will be taxed at 22.5% on excess, which of course will increase tax burden. The company profits are subject to corporation tax rates. Those are lower than income tax rates.

The most catastrophic scenario is when director takes his reward from company as salary. Then his/her salary is taxed at income tax rates (like a sole trader's income). That is because, unlike sole traders, tax system treats companies as separate from their owners because a company is a separate legal entity. The problem is that income taxes are higher than corporation tax rates. On top of that, they will be subject to employee and employer national insurance contributions, which of course increase tax burden and render his position worse than even an unincorporated business ("sole trader"), because NIC Class 1 on payroll are higher than NIC Class 2 paid by self employed.

In contrast, a self employed person ("sole trader") is taxed at income tax rates on profits from his business, which are added to his other sources of income. As it has already been mentioned, income tax rates are overall higher than corporation tax rates. On top of income tax, national insurance contributions class 4 are payable on business profits within a specified band (7% on profits between œ4,615and œ30,420). National insurance contributions Class 2 are also paid by self-employed people, although those are lower than those payable by company directors on their salaries.

To illustrate above, let's take a simple example. We have a limited company and a sole trader. They both make œ60,000 profits each in tax year 2002/03. We assume that company director takes a salary equal to amount of his personal allowances (untaxed income) of œ4,615 and balance as dividends. The company will pay corporation tax at 19% equal to œ10,523 and nothing else. The sole trader will pay income tax œ16,542, National insurance Class 2 œ104 and National insurance Class 4 œ1,806. Total œ18,452. The bottom line is that person that has incorporated his business into a limited company will make a tax saving of œ7,929 compared to a sole trader! Isn't that fantastic?

Somebody might be wondering: why is this entire happening? The official explanation is that, this government, to help economy grow, encourages people to leave as much profits within their businesses to be reinvested, instead of being taken out and spent.

Short of going door to door in a Santa suit, how can businesses increase profits and prevent a blue Christmas? Despite economic gloom, industry leaders have found that an e-mail follow up strategy can increase sales by a cheery 35%! To weather ailing economy, use a follow up autoresponder during your holiday campaigns.

---------------------------------- What Does It Do? ----------------------------------

Follow up autoresponders follow up with your leads for you. You create a series of messages, and decide when they should be sent, (daily, weekly, etc.). Your autoresponder will send messages to each new lead automatically. With no further intervention from you, your leads will remember you throughout winter chill. And this regular reminding will mean more sales during all-important holiday shopping season.

Give yourself gift of a higher conversion rate! Follow up automatically using these simple steps:

* Offer Useful Information * Personalize Your Messages * Track Your Leads * Broadcast Tailor-Made Offers

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Write your follow up messages for your leads - not for yourself. You want to talk about your great service, but your leads just want to know what they'll get out of it!

At some point, you must have purchased something like your product. What were you looking for then? Was it information about pricing, styles, or holiday gift wrapping? Maybe just a clearer explanation of product? Figure that out, and put answer in your follow up messages. That's what your leads want to know.

---------------------------------- Personalize Your Messages ----------------------------------

You don't open postal mail addressed to "Current Resident", and your leads aren't going to read e-mail addressed to "Dear Internet Friend." People are simply more likely to read messages that address them by name.