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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
  • Here are the main small business tax rates and allowances for the tax year  of 2018/19.
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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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    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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    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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    If you’re self-employed or a company director, you must fill in an annual self-assessment form. If you’re submitting your return online, don’t leave things until the last minute, as you won’t be able to do so without an activation code.
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    In this article, we look at the tax benefits of a limited company and drawing down income in the form of dividends as well as salary.
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    Hands up if you thought bookkeeping and accounting were the same thing…

    Don’t be embarrassed if you are waving your hand in the air right now, you certainly won’t be the only one. It is a common misconception and an understandable one, since the two professions do share some similarities.
    [read the full article]

    Limited companies can distribute profits they generate via dividends to company shareholders. However, you must ensure that all dividend distributions are legitimate, otherwise you could fall foul of HMRC.
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    When you hire a new accountant for your business, you will typically agree an upfront fee to cover the wide array of tax and administrative tasks required to keep your books in order. Here we consider the typical tasks an accountant will provide.
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    If you work from commercial premises – either as a tenant or owner, you will probably have to pay business rates to your local council. Here we look at what business rates are, how much you have to pay, and the wide range of ‘relief’ schemes which are available to small businesses.
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    One of the questions many limited company owners ask their accountants is how often they can draw down dividends from their companies. Can you declare dividends on a monthly basis, for example?
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    If you pay income tax via self-assessment, and have a tax liability for the current year, you may need to make advanced payments for the following tax year too – known as payments on account.
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    One of the key announcements from the second 2015 Budget was a complete overhaul of the dividend taxation system from April 2016, which will result in higher taxes for limited company shareholders.
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