| Setting up a business - and the future running of that | | | | requirement to pay a higher level of tax. The wording |
| business - is something that is generally aimed at | | | | is important there - avoiding the requirement to pay tax |
| creating the conditions whereby one can make as | | | | is sound financial management. Avoiding tax - or tax |
| much money as possible. Although there may be any | | | | evasion - is an excellent way to earn a spell in prison. |
| number of other, more high minded and well intentioned | | | | There will still be taxes to pay if you form a |
| reasons for creating a company, the fact of the | | | | corporation, but the tax burden will be lower. This is a |
| matter is that when a company is judged externally, | | | | way of encouraging wealth creation - who is going to |
| the first instinct of most people will be to take into | | | | try to make a fortune if they know they won't see |
| account how much money it made. This is affected by | | | | much of that money? - but also of discouraging sloppy |
| many things. If the management of the company has | | | | business practices. Tax breaks for small business |
| done its job correctly, the company will in all likelihood | | | | have long been a popular political tool, particularly in |
| have made a great deal of money. Not all of that | | | | election years. |
| money is profit, however, and before you arrive at the | | | | In America currently, the level of corporation tax is on |
| bottom line there is more to take into account. | | | | a sliding scale, with rates at 15% of profits for |
| Aside from matters like wages, consultant's fees, | | | | businesses earning less than $50,000 a year, going as |
| materials and the general costs inherent in running a | | | | high as 35% for businesses earning more than $18.3 |
| business, it is important to take into account the issue | | | | million. This is not unusual, but in the United Kingdom, |
| of taxation. This is a matter that features prominently | | | | always considered a close political partner of the |
| when one speaks of turning a business into a | | | | United States, the sliding scale begins at 21% for |
| corporation. Successful business people have a way | | | | businesses earning less than £300,000 (nearly |
| of knowing how to make more money, and chief | | | | $490,000), up to 28% for any business earning more |
| among these techniques is the ability to lose as little of | | | | than £1.5 million (close to $2.45 million). Tax rates |
| their existing pot of money as possible in the first place. | | | | vary around the world, but vary around the same |
| There are certain creative accountancy measures | | | | points. In the developed world, the country with the |
| that are highly illegal and if detected these can land | | | | lowest corporate tax rate is Ireland, with 12.5% as a |
| someone in jail very quickly indeed. It is better to find a | | | | flat rate. |
| legal framework in which one can operate. Tax | | | | Disclaimer: This article is for informational and |
| evasion is illegal. Tax awareness, however, is perfectly | | | | entertainment purposes only, and should not be |
| legal and practiced by the most profitable businesses. | | | | construed as legal advice on any subject matter. |
| By setting up a corporation, it is possible to avoid the | | | | |