Running a business in the UK means you and your company will be subject to a number of different taxes. What you pay and how much you pay will depend on the size of your business, your turnover and profits and whether you employ staff.
If you’re not sure which taxes you and your business will need to pay, speak to Worcester Business Central today for advice.
Types of Business Taxation
The main taxes you may encounter as a business owner are listed below:
– this is a tax on Iimited companies’ income or profits. As the business owner, you are responsible for calculating your corporation tax liability and paying the correct amount to the Inland Revenue. Further information can be found on the Gov.uk website.
Value Added Tax (VAT)
– most business-related goods and services are subject to VAT. This is a tax on the final consumption of goods and services but is collected at every stage of production and distribution. Your business will need to register for VAT if your annual taxable supplies exceed the current VAT threshold. There is also a flat rate VAT scheme which may benefit some small businesses. Speak to us today to find out whether you are eligible. Read more about VAT on the Gov.uk website.
– national insurance is a deduction from earnings. Directors of limited companies will be liable to pay national insurance contributions on their earnings; however, their business will also be liable to pay NICs as their ‘employer’. Companies can currently benefit from the Employment Allowance, where they can reclaim up to £2000 in employers NICs. Please speak to us today to find out more. Find out more about national insurance on the Gov.uk website.
– Pay As You Earn is an HMRC scheme to take income tax from employees as they earn. As a sole trader you will not need to pay PAYE, however as a director of a limited company, if you take a salary, you will be liable for PAYE as your business employs you – this also applies for your employees. The Gov.uk website has further information on PAYE on their website.
Your business may also be affected by Capital Gains Tax or Capital Allowances if you dispose of your business or make significant capital investments.
Need More Information?
If you need help with business taxation, speak to Worcester Business Central today.