1.1 OTS final report on 'Sole Enterprise with Protected Asset(s)' (SEPA)
The OTS has issued its final report on its investigation into the potential for a new simple trading vehicle to offer a simpler route in tax and related areas for small business ventures. It has concluded that a vehicle offering 'SEPA' status would be helpful for sole traders seeking liability protection while retaining the simplicity of operating as a sole trader.
SEPA is a vehicle that does not have a separate legal identity, but is obtained through registration by a sole trader. One of its main benefits would be to offer an element of limited liability without the need for the extra administration required by creating a company or limited liability partnership.
While the report recognises introducing a new trading vehicle does present issues, mainly around bank lending and the position of creditors, the OTS do not see any of them as insurmountable. The OTS work indicated the assets that should receive limited liability protection through SEPA would be the trader's main residence and possibly the individual's pension fund, although see the note at 1.5 below regarding the recent Horton v Henry decision.
1.2 Tax investigations...