According to the South Eastern Society of Chartered Accountants, recent changes have made incorporation look much more attractive for many sole traders and partnerships.

Charles Hemming, president of SESCA, said the organisation was already seeing an upsurge of interest from small businesses thinking of making the transition.

He said that, although it might not be right for all, in the light of recent changes in tax and audit rules incorporation was well worth considering.

From next April there will be a new low level corporation tax rate for companies with profits of up to £50,000.

Mr Hemming said: "That will cut the tax burden for small but growing businesses, those where the money is being ploughed back in rather than being taken out as income.

"They are the most likely to benefit by incorporating."

He said the climate had changed and was now more advantageous to small companies.

"Many self-employed people will find it tax efficient to run their businesses through a company and a number of businesses are deciding that it is now better to incorporate."

However, Mr Hemming warned that the chancellor planned to attack companies which provided the services of one person to one customer only.

"This method of avoiding the worker becoming an employee is frequently used in the computer industry.

"The Chancellor has warned that he will be attacking this sector in next year's Budget," he said.

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