Corporation tax only applies to limited companies so sole traders and self employed people have nothing to worry about. This tax is based on the companies profit or taxable income. It is the business’ responsibility to file the corporation tax with HMRC, similar to a self assessment. Corporation tax is currently set at 17% as of 1st April 2020.
Value Added Tax
Value Added Tax is a tax that applies that is added to most goods and services sold in the UK. In general, the rate of VAT is set to 20% of the overall price of the product or service. A business can voluntarily register for VAT at any point but it is essential to register when the turnover exceeds £85,000.
National Insurance is essential if your business employs staff. Even the director of a limited company is liable to class 1 NICs and your company also has to pay Class 1 NICs too. Employees pay 12% on earnings between £155 and £827, and 2% on higher earnings. Employers pay 13.8% on earnings above £156.
Sole traders must pay income tax based on the profits of their business. Once your profit exceeds your personal tax allowance (£12,500 – 2020), you will need to start paying income tax. If you are the director of a small company, you pay income tax on any wage you take from the business and you will pay the same tax thresholds as a normal staff member.
Business rates all depend on the type of business you have and where it is located. For example, office based businesses may need to pay business rates. They are most often applied when the business is based in a dedicated premises like offices or a shop. Different businesses will pay different rates so it is a good idea to find out what you need to pay.
Should you become the victim of a Tax Investigation, we will work tirelessly on your case to ensure you don’t have to endure the high costs. We work with HMRC on your behalf to resolve the problem, leaving you to focus on the business.
Capital Gains Tax
Capital Gains is a tax on the profit when you sell something that’s increased in value. The tax is on the gain, not the full amount. Why us for Capital Gains Tax? CGT is a very complex and complicated field with a lot of reliefs and exemptions available so knowing which apply to you can lead to significant savings!