Many, on advice, use a single purpose company to enjoy low corporate tax rates. Following the Budget these rates will reduce from the current 20% to 19% from April 2017 and then to 18% from April 2020.
In addition, from April 2016 individuals will be able to receive £5,000 of dividend income free of tax. Dividends will be taxed at 7.5% for basic rate tax payers, 32.5% for higher rate tax payers and 38.1% for additional rate tax payers.
In addition a review of the IR35 system of taxation is being timetabled which is designed to tighten up the current rules for personal service companies.
Dividends held in ISAs and pensions will continue to be tax free.