The Chancellor has for several years now been trying to re-classify as many self-employed individuals, as possible as employees, and these new measures may be a further phase of this.

The 1% increase in National Insurance Contributions from April 2003 adds to both employees' and employers' costs and anyone incorporating may end up paying both.

As a director you can pay yourself in dividends as well as a salary, and dividends are not subject to NIC’s.

You need to achieve the right balance between dividends and salary to maximise the tax advantages and if you pay yourself too much in dividends the taxman may argue your salary bill should be higher.

You can retain and roll-up profits in the company. This means you will pay corporation tax, but his is a lower rate than both lower and higher rates of income tax.

There is an increased administrative burden with a company vis-à-vis self-employment and therefore your accountancy bills are likely to be higher.

You would need to change all your stationery so that it includes the full company name, its number and registered address.

You need to remember that the public will have access to your accounts through your returns to Companies House.

On the other hand, incorporation protects your personal assets, and in these days of claims and litigation for all sorts of reasons it can be a powerful incentive for peace of mind.

For Landlords and property investors (in particular) there's also the question of whether you incorporate the assets of your business, i.e. the properties themselves.