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.
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?
As an employer, managing maternity leave is an inevitable part of doing business. You will be understandably thrilled for your employee, whilst also wondering whether your team will be overstretched, or how this change might hurt productivity. On top of that, you have the financial commitments surrounding UK statutory maternity pay (SMP) to navigate. It can all end up feeling rather admin heavy.
When operating on a self-employed basis as a sole trader, you are your own boss, which means that you’re legally responsible for the financial affairs of your business, including the maintenance of financial records, daily bookkeeping and retaining the likes of invoices and receipts. As you keep close watch of your income and expenditure to ensure that the business is running smoothly, there are reporting obligations you are required to meet, writes Mark Halstead of Red Flag Alert.
If you are classed as self-employed or have a source of untaxed income, you will be required to complete a Self-Assessment. However, this criteria is vague and many are left confused as to whether they actually need to file the tax return or not.
As a limited company director, you will usually pay yourself a small salary, and draw down most of your income as dividends. Are there any rules which govern the level of salary you take, and what are the tax implications?
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.
A leading tax body says that many smaller companies may find complying with the new Real Time Information (RTI) payroll rules will be ‘impossible’.
From January 2013, new rules come into force which will make Child Benefit means-tested for the first time. The controversial changes mean than a couple earning £50,000 each could keep the benefit, but a couple with one single earner on £60,000 would lose the benefit entirely.
The press coverage of the current outcry over public sector figures working via their own personal service companies has resulted in many inaccurate tax claims being made by the media.
If you operate a PAYE (Pay-as-you-earn) scheme via your limited company, you should be aware of upcoming changes to the way your communicate payroll data to HMRC from April 2013.
PAYE stands for ‘Pay As You Earn’. Every limited company, even if the director is the sole employee, must register to set up its own payroll, which deducts income tax and National Insurance Contributions from salaries paid to all staff employed by the company.