12% increase in number of incorporated vet practices last year
The number of veterinary practices that have (or partially have) an incorporated business model increased by 12% in 2020 compared to 2019.
That’s according to a survey carried out by accountancy firm HLB Sheehan Quinn, which found that 42% of surveyed veterinary practices were incorporated last year.
This compared to 30% of practices in the same survey in 2019, itself an increase on the 23% of practices that were incorporated in the corresponding 2018 survey.
HLB indicated that some of those practices do not intend to move to a incorporated model because they are “concerned about Revenue’s attitude”.
“While transactions are always open to Revenue scrutiny, there is no prohibition of incorporation once it’s done correctly from a legal and tax compliance point of view,” the firm said.
HLB outlined a number of situations that might make a practice suitable for incorporation. These include: profits exceeding what is necessary to support the owner’s lifestyle; intending to introduce a new partner or fund the exit of a partner; when looking to invest in a new property; or looking to incentivise key staff by giving them a stake in the future in the business.
The accountancy firm also highlighted certain benefits to incorporation, including the corporate tax rate (which is lower than income tax); easier access to funds from banks; the possibility of capital reliefs; and limited liability.