For those of you that run your own business consider your business structure. Many businesses start out on a sole trader basis as it is straightforward and simple, but then as profits grow it may become more beneficial for commercial and tax reasons to change.

Family members who work within a business can be included in the ownership structure via a partnership arrangement, this splits the profits between family members and allows each partner to make full use of their personal allowances. The business has to complete a partnership return each year and the partners have to complete self assessment returns which include their share of the business profits.

A limited liability partnership is one step further than a general partnership. It is a separate legal entity in law and limits the liability of the partners as for a company, but the partners are still taxed as individuals on their earnings.

Many business including family run business form limited companies. This gives you more control on how and when you are taxed. You can take money out the company through a salary to make use of your personal allowances and to qualify for the state pension. Then the rest of your profits can be left in the company to reinvest after corporation tax, or taken out as dividends which are not subject to national insurance. The corporation tax rate on small company profits is 20% for 2013-14.

There are other advantages in forming a company despite the extra administration costs. The liabilities of the owners are limited and they will not be personally liable for losses made by the company, companies often carry more credibility with the public and suppliers and your company name is protected once registered with Companies House. A company structure can make it more straightforward to sell on the business or to obtain funding for expansion or development.

Contact an accountant to see if a change in structure would work for you and to see some initial calculations based on your earnings and profits.