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Small Business Guides on Tax and Business Accounts

A selection of our most popular tax guides, focusing primarily on limited companies:

  • Limited Company Tax Basics
  • Tax rate and allowances 2018/19
  • National Insurance
  • PAYE
  • Home Office Expenses
  • Dividends
  • Expenses
  • When starting a small business, one of the first things to be decided is the legal structure used for the business. It can either be a sole trader (also known as a sole proprietorship), a limited company or a partnership. Setting up as a sole trader is the most popular legal structure in the UK, with approximately 3.4 million sole proprietorships created in 2017. Sole traders accounted for 60% of small businesses in the UK. There were also 1.9 million limited companies, making it the second most popular legal structure.

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    When you are self-employed you will pay your tax based on the income and expenses you show on your Self Assessment tax return. Here Simple Tax will give you an insight of the Self Assessment process and your legal obligations as a self-employed individual.

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    If you set up a limited company, is appointing a limited company accountant to look after your affairs a statutory requirement, or can you take care of your accounting duties yourself?
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    Value Added Tax is charged on almost all products and services provided in the UK. The current standard rate is 20%. If your business becomes VAT-registered, you will charge VAT on all invoices you submit to your clients.
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    When your company turnover reaches the ‘VAT threshold’ (currently £85,000) in a twelve month period, you must register for VAT. Even if you don’t, there may be professional reasons why you would want to register anyway. So, how does the VAT registration for limited companies work?
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    It is not a widely known fact, but company directors can receive statutory redundancy pay from their limited company under certain circumstances. If your company becomes insolvent and has to be liquidated, whether this happens on a voluntary basis or forcibly via a creditor’s winding-up petition, you may be eligible to make a claim.

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    Small business owners often make the mistake of believing HMRC only investigate the tax records of big players. Wrong. Last year HMRC were seen to be cracking down on tax avoidance and increased its investigations into smaller firms.

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    The government are wanting to renovate the way we process and submit our taxes through Making Tax Digital (MTD) for VAT. Overall the scheme will allocate every taxpayer with a digital ID, this means that businesses and individuals will be able to manage all their tax activities online, reducing errors and late submissions for a more efficient system.
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    It’s important to be aware of all the 2019 tax dates and deadlines, especially those that will effect your small business. Some of the tax deadlines such as the self-assessment and VAT tax return take considerable amount of preparation and time beforehand. So make sure you take note of all the dates that are relevant to you and your small business in order to get prepared.
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    When running a small business, saving money and cutting costs where you can should always be a priority. By being smart when dealing with taxes it can actually save you a considerable amount of money. If you are efficiently dealing with your taxes, it could be the difference between a steady profitable business to one that’s just barely getting by.
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    Here are the main tax rates and allowances for 2018/19 that are most relevant to small businesses.
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    In this article, we take an overview of the main limited company tax you will be liable to pay (or collect) as a limited company, and when you have to pay them.
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    Salary aside, most limited company directors (and shareholders) typically draw down most of their income in the form of dividends. Dividends are distributed by companies of all types in order to return a proportion of company profits back to their shareholders. Here is the guide to company dividends and how to calculate dividend tax.
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    Here are some tax and finance tips which could help you save money as a limited company owner, based on our experience of running limited companies, and dealing with accountants and tax advisors over the past 15 years.
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    If you are thinking about getting private healthcare insurance for yourself and your family, you can pay for it in two ways. You can either pay for your private healthcare insurance through your limited company or do it from your personal accounts. Depending on various factors, the tax efficiency of both methods will vary. Therefore, it’s always a good idea to get an opinion of an accountant to help you find the best option.

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    Here are the main tax rates and allowances for 2017/18, that are most relevant to small businesses.
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    The current VAT threshold in the UK stands at £85,000. Any business that has an annual turnover of that value must register for VAT with HMRC, and when they do this they will receive a VAT number. Before you work with another business, you normally want to find out all you can about them and you can easily do this through a Google search. However, something you might not consider looking at is their VAT number, and this is actually something that you should definitely be verifying.

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    In a study conducted by the FSB (Federation of Small Business), it was found that businesses spend £5,000 annually on tax compliance. As well as money, small businesses also lost out on three working weeks in making sure that they had their tax affairs in order. Small businesses are consistently losing time and money over tax payments which is why they are urging the government for a tax reform. The money being drained by tax compliance can be better spent on growing businesses.

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    Being in control of your finances is key to keeping your earning model afloat. That’s why it’s so important to stay on top of your books as a contractor or a small business owner as you have multiple income streams to deal with. Effectively managing your finances can do wonders for the process of bookkeeping for your small business.

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    The digital age is upon us. HMRC is planning a total digital switchover which is set to be rolled out from April 2019. For some, this isn’t anything new – Making Tax Digital (MTD) has been in the public domain for a good while now.

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