It is important that everyone in business to be aware of what are the UK taxes apply to them as an individual as well as to their businesses and where to get professional advice and help. Good tax planning may result in paying minimum tax but you must be aware of the good practice of tax avoidance and the illegal practice of tax evasion.
Concise Accountancy has a dedicated team of tax professionals that would be able to help you with yours and your business tax affairs. Here are some of the UK taxes that every person in business must be aware of.
Income tax
If you are under employment, you will be taxed under the Pay As You Earn (PAYE) Scheme. Your employer will be responsible for deducting your PAYE and your national insurance contribution (NIC) from your salary or wages. They will pay the deductions together with their part of national insurance contribution to Her Majesty Revenue and Customs (HMRC).
If you run a limited company, withdrawing salary, you will have to register for PAYE with HMRC and pay your taxes and NICs as an employee.
Self-assessment
This is what you do as a self-employed person or partner in an unincorporated partnership firm or a Limited Liability Partnership (LLP). You then pay your income tax in two lumps, in January and July. You need to file your personal tax return with HMRC by 31 January. Concise Accountancy provides taxation services to individuals helping them to work out and complete their personal tax return.
National insurance
Both employers and employees have to pay national insurance contributions to HMRC. The percentage of NIC payable by each party is varied. Ask our accountants for the current NIC rates. These contributions must be paid to HMRC every month together with the PAYE deductions.
VAT
If your annual sales have exceeded the VAT registration threshold you have to register with HMRC and charge VAT to your customers. At the same time, you can reclaim input VAT that others charge you.
Business rate
This tax is charged on business premises and collected by the local authority. Some landlords include it in the rent. You need to check your rental agreement.
Corporation tax
Limited companies (Ltd Co) and Public Limited Companies (PLC) pay corporation tax on their accounting profits. If you have purchased some business assets such as computers, company vans, office furniture you may claim capital allowances on those assets which will reduce your company tax bill.
Cars and vans
If you are a director or employee of your business and the business pays for your car expenses, you will be taxed on it as a benefit in kind. The reimbursement from your employer will be included in your Form P11D.
Expenses
If you incur expenses, say for tube and taxi fares in connection with your business, you can pay yourself back. You need to keep the receipts and claim as petty cash expenses.
Overseas
When you buy or sell outside the UK, particularly outside Europe, you may incur additional tax liabilities. Your local Chamber of Commerce can advise you.
Cash Rich Business
Tax officials know what kinds of business have the most cash transactions. They can calculate what your sales should be from your purchases or compare your business with similar businesses or the industry average. Do not pocket the cash.
Concise Accountancy – Paying less taxes comes from better tax planning
