There has been a marked increase in Company formations in the UK. A recent survey of 1,000 micro businesses by Mori cited the main reason for incorporation was the protection which Limited Liability provided (24%). The second main reason was tax and national insurance savings (19%). Other reasons related to complying with contract requirements and having a formal structure.
Once the business had incorporated however the reasons changed a little with the top benefit seen as “improved recognition and credibility” (22%) with tax and NI savings moving up to 20%.
It is worth noting that the UK has one of the world’s most business friendly Company regimes. It is easier, quicker and cheaper to form a UK Company than in almost any other Country in the world, to the extent that I offer my Clients a free Incorporation service with a 3 hour turn round.