High Taxes Biggest Business Threat Says Lloyd’s Survey

High Taxes Business Biggest Threat

Top executives at North American companies view high taxation as the biggest risk to business according to a recently released survey by Lloyd’s of London. The findings are significant because when the survey was last conducted in 2011, increased taxes were 15th on the list of business risks. (See the full survey here.)

“With business tax in the spotlight and rising up the political agenda, executives are understandably concerned,” Lloyd’s CEO Richard Ward said in a statement. “Yet the danger is that an emphasis on near-term, operational issues comes at the expense of significant, strategic decisions that have previously exercised business leaders,” he said.

The Lloyd’s survey spotlights one of the advantages of forming an 831(b) micro-captive as an insurance and risk management tool as a way to reduce taxes and effectively finance numerous risks. The formal name of this particular captive refers to Internal Revenue Code Section 831(b), which allows businesses to form their own insurance companies (the micro-captive becomes this company) with less than $1.2 million in annual premiums. Forming an 831(b) micro-captive allows privately-held California companies to reduce its corporate tax by as much as $500,000 per year and benefit from an improved strategic risk management structure.

The micro-captive only pays taxes based only on the investment income.

To learn more about forming a captive for your company, download my ebook on the subject here. As always, I am available to advise you on the best way to manage your company’s risk and increase profits.

 

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