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.
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.
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.
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 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.
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.
There are several crucial aspects and documents for a business to operate smoothly and remain solvent. One of the essential files for your enterprise is an invoice.[continue reading…]
Readers questions: Can I be a limited company if I am a not a UK tax resident? I left the UK 7 years ago and live in Spain. I have been asked by an agency who I will be working overseas for, to supply invoices for work done. Can I issue an invoice to this agency without being registered as a limited company?
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.
Readers’ Question: I want to start a business and have looked at both the sole trader and limited company structure. I think that running as a limited company will be better for me. What is the best and most cost-effective way to register a company?
Readers question: I bought some goods which I intended to sell via my company before I actually incorporated. These goods were not bought under the company name but instead under my name. Can I still add this to my accounting tool as the cost of goods?
There is no doubt that accounting software can come with great benefits for your small business. From helping you keep up with the tax deadlines to making it easier to keep records of your business finances, accounting software can be a great help. But how do you choose the right one?
As only 57% of businesses have recently reported that they are ready for the Making Tax Digital (MTD) for VAT deadline, we want to ensure that small business owners are prepared for the future of accountancy. Essentially, the industry is in a period of transition where businesses with an annual turnover over the current VAT threshold of £85,000 (as of 2019/20) are required to digitalise their VAT accounts.
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.
Most small business owners will have heard of Making Tax Digital (MTD), but what exactly is it and what does it mean for your business? It’s been a hot topic in the world of finance and accounting since the government announced its plans in the spring 2015 budget. There’s no shortage of information and tax advice relating to MTD, and in fact, it can feel like there is an overwhelming amount. For those of us who aren’t financial experts, it can be confusing and hard to understand exactly what the obligations of small business owners will be under the new rules.
Chancellor of the Exchequer Philip Hammond stayed away from big bold giveaways in his Autumn statement, but the Budget contained plenty for businesses to digest.
Every business owner knows just how exciting starting a business or scaling up can be, but that’s not to say it doesn’t come with its own challenges. Increasing ROI and tax-efficiency are usually at the top of every small business owner’s agenda, and putting procedures in place so that you can enhance cash-flow through becoming tax-efficient doesn’t have to be hard. London based accountancy firm, 3 Wise Bears have put together five tax reliefs and tax incentives that every small business should know about, and how they can apply for them.
Are you aware there isn’t long left until Making Tax Digital for VAT comes into force? From April 2019 VAT registered businesses with a turnover over £85,000 will need to ensure that all VAT returns are submitted digitally using the HMRC new platform known as Making Tax Digital (MTD). Around 40% of businesses that will be affected by MTD when it comes into effect are still unaware. Therefore, HMRC has recently started an awareness campaign to get businesses prepared before the date.
The chancellor has delivered his most small business friendly Budget to date. The Budget has bought in good news for the anxious small businesses. There is always a nervous environment pre-Budget, and small business owners can now breathe a sigh of relief. From the VAT threshold being kept at £85,000 to the fuel duty to be frozen for the ninth year running, the chancellor has been praised by the small business community.