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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 2019/20
  • National Insurance
  • PAYE
  • Home Office Expenses
  • Dividends
  • Expenses
  • The tax on dividends is paid at a set rate that is set by the HMRC. Every new tax year, as with other taxes, the rates change. The biggest change in the last couple of years is the tax-free dividend allowance being reduced from £5,000 to £2,000.

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    With a new tax year come the new tax rates and allowances. Although there has not been a great significant change in the rates and allowances for 2021/22 compared to 2020/21, the government has announced that a lot of the tax rates will be frozen till 2026. This is due to the pandemic and the current state of the economy because of it.

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    As anticipated, Rishi Sunak’s budget on 3 March 2021 was focused on protecting jobs and livelihoods, with a focus on extending and opening further access to COVID-19 support measures. This was a required move by the Government, particularly with lockdown restrictions prevailing until 21 June at the earliest.

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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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    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.

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    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 2020. Sole traders accounted for 59% of small businesses in the UK. There were also 2 million limited companies, making it the second most popular legal structure.

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    In this article, we give you an overview of the basics of limited company tax as written by the senior accountant from Dolan Accountancy. This includes the various taxes you will be liable to pay (or collect) as a limited company, and when you have to pay them.

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    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.
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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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    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.
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    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?

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    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?
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    It’s important to be aware of all the 2021 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.
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    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.

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    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.

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    In this article, we look at the services most accountancy firms can offer to small businesses – with particular reference to limited companies.
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    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.
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    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.
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    If you are a limited company director, you are liable to pay both employers’ and employees’ National Insurance Contributions on any salaries you pay above the current threshold.
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    Readers question: How do I pay myself as an employee of my limited company?

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