WHICH TAX?
AND EXPERIENCE THE DIFFERENCE
Paying tax isn’t supposed to be a punishment, but it is a responsibility. If you’re having trouble managing your own duties, let’s start at the beginning. You know what they say, ‘slow and steady… ensures full tax compliance in a way that benefits and advances your business’.
Okay fine, that’s not the saying, but it works for this situation.
Here’s what each tax means and how it could impact your business.
CORPORATION TAX
Corporation Tax must be paid by all limited companies in the UK and is calculated on annual profits – in a similar way to personal income tax. Unlike individuals, however, businesses don’t receive any kind of tax-free allowance, but there are several expenses and deductions that can be claimed to reduce your bill.
Think Corporation Tax doesn’t apply to you? Hold up, because it just might if you are a:
- Members club, society and association
- Trade association
- Housing association
- Group of individuals carrying out a business
VAT – VALUE ADDED TAX
VAT stands for Value Added Tax and is calculated on the sale of products and services in the UK. Is it ‘consumption tax’ or ‘indirect tax’, we hear you ask? Well actually it’s both, and we’ll explain how…
It’s a type of ‘consumption tax’ because it’s charged on items that people buy, but it’s also an ‘indirect tax’ because it is collected by businesses on behalf of the Government.
Registering your business for VAT isn’t optional if one of the below applies to you:
- You have good reason to believe your VAT taxable turnover will be more than £85,000 in the next 30-day period
- Your business had a VAT taxable turnover of more than £85,000 over the last 12 months
FEELING OVERWHELMED?
GIVE US A CALL TO DISCUSS HOW WE CAN HELP YOU MANAGE YOUR RESPONSIBILITY.
LET'S CHATPAYE/NI
As a business with employees, you normally have to action PAYE within your payroll duties – and it isn’t optional. For those who don’t know, PAYE is HM Revenue and Customs (HMRC) system that allows them to collect Income Tax and National Insurance from those in employment.
With that in mind, it’s fundamental you make deductions for PAYE when paying your employees through payroll. Deductions must be taken from employee salary or wages, but also things like any tips or bonuses, or statutory sick or maternity pay.
If you run payroll yourself, you’ll need to report your employees’ payments and deductions to HMRC on or before each payday… And who has time for that?! Instead, give the responsibility to your friendly experts at Forbes Young.
