When you run a small business, you need to understand the different business taxes and how these will impact your business finances. Your accountant should be able to help advise on these, but understanding business taxes better yourself, can help with financial planning throughout the year.
This is the hottest topic in accounting currently, so we had to mention Making Tax Digital. For a more detailed update, have a read of our Making Tax Digital Bulletin published in February 2019. All businesses will need to start getting ready to keep all their records in such a way that they have continuous two-way communication with the HMRC. This is either by using accounting software or utilising specific types of spreadsheets
All businesses can become VAT registered, whether they are operating as a sole trader, Limited Company or Partnership. VAT returns need to be made every quarter to the HMRC. From April 2019, businesses that businesses whose annual turnover is above the annual turnover threshold of £85,000 must use Making Tax Digital to file their VAT returns.
If you operate your business as a sole trader, then you can claim the personal allowance. This is the amount of tax-free income that you can earn before having to pay tax. The personal allowance is currently £11,850 for 2018/19. This figure will be increasing to £12,500 for 2019/20.
Corporation Tax has to be paid by Limited Companies on all their profits. The main rate of corporation tax is currently 19%. The rate will fall to 17% for the Financial Year beginning on 1 April 2020.
R&D tax reliefs support companies that work on innovative projects in science and technology. For more information about this read our blog R&D Tax Relief for businesses. From 1 April 2020, the amount of payable R&D tax credit that a qualifying loss-making company can receive in any tax year will be restricted to three times the company’s total PAYE and NICs liability for that year.
We work with all our clients to help them understand their tax liabilities if you would like any advice on business taxes, then please do get in touch by calling 01623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it..
Haidee is our Personal Tax Director and is a fully qualified tax adviser, having achieved the ATT qualification in 2006. Tax efficiency being her main concern. Specialising in taxation, Haidee provides clients with advice on personal tax, PAYE services, VAT and social security. She also provides guidance to new start-up businesses.
Call us today on01623 490120
or email info@watsonk.co.uk
When you first start a business, your focus is usually on attracting customers, generating sales and building a successful company. Few business owners spend much time thinking about how or when they will eventually leave the business.
More blog posts