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 or limited company or a partnership. Setting up as a sole trader is the most popular legal structure in the UK, with approximately 3.5 million sole proprietorships in 2019. 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.
Small Business Guides on Tax and Business Accounts
Throughout lockdown, the Government has made significant financial contributions to UK businesses to help mitigate the economic impact of the pandemic by way of a £330bn war chest. Now that Britain is re-opening and adjusting to a new normal, HMRC will want to recoup as much of that initial outlay as possible through taxation.[continue reading…]
In this article, we look at the services most accountancy firms can offer to small businesses – with particular reference to limited companies.
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 we look at what are company dividends and how to calculate them.
As a limited company owner, your company is liable to pay Corporation Tax on its profits. All UK companies are liable to pay tax on their profits, regardless of where in the world these profits were accumulated. We have put together this guide for your to understand what corporation tax is, how to account for it, be able to calculate it and the corporation tax rates and allowances.
If you have started a business or are thinking about starting one, then you will need to decide on a business structure. You can choose to create a limited company, work as a sole trader or a partnership. Each business structure varies, especially when it comes to accounts and the bookkeeping. Sole trader owners are classed as self-employed, therefore they have their own set of tax rules and regulations to adhere to.
When your company turnover reaches the ‘VAT threshold’ (currently £85,000) in a twelve-month period, you must register for limited company 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?
If you set up a limited company, you are not legally required to appoint an accountant, although there are multiple benefits of doing so. In this article, we discuss if appointing a limited company accountant to look after your affairs a statutory requirement, or if can you take care of your accounting duties yourself?
It’s important to be aware of all the 2020 tax dates and deadlines, especially those that will affect your small business. Some of the tax deadlines such as the self-assessment and VAT tax return take a 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.
There are a number of ways in which you can set up and run your business in the UK. In this guide created by OrangeGenie, we look at the differences between sole trader, partnership, Ltd and PLC. We will focus on explaining what the type of company is, the tax implications, and the advantages and disadvantages of each.
If you decide to become self-employed, either on your own (as a sole trader), or with other people (as a partnership), you will be responsible for working out and paying your tax liabilities to HMRC.
Readers question: How do I pay myself as an employee of my limited company?
It is, unfortunately, the case that IR35, Public and Private Sector off-payroll rules are something of a minefield. It’s a complex area of tax law so it is not surprising that contractors and freelancers get confused and struggle to understand all the implications.[continue reading…]
As the country enters into a national state of emergency due to the coronavirus pandemic, households and non-essential businesses have been ordered into lockdown following the enforcement of a stay-at-home order relayed by Prime Minister, Boris Johnson. As businesses are ordered to temporarily close shop and workers are instructed to work from home where reasonably possible, the economy is experiencing a downward spiral in trade, raising the red light for many smaller enterprises with less in cash reserves.[continue reading…]
For small businesses running payroll can be a headache and fear of making mistakes means it can be very stressful. Unfortunately, Payroll is difficult, and errors can be expensive. This is why there is a professional body for payroll professionals (CIPP) which has exams which are tough to pass.[continue reading…]
You’ll be aware that HMRC is bringing in new, stricter rules around using contractors and consultants, known as IR35 effective April 2020. These new rules are intended to stop contractors, freelancers and consultants being used as “disguised employees” to avoid paying tax and benefits.[continue reading…]
If your contracts are caught by the IR35 rules, the financial impact will be considerable. Here, we look at the tax difference you will incur if you are inside or outside IR35.