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We've scoured the web to get you the most up-to-date advice which includes the most useful tools on offer from the officials themselves.

Effective tax planning is essential if you are to minimise your tax bills. Simple tax planning can significantly reduce your tax liabilities.

The self-assessment tax return is an unavoidable burden if you are liable for self-employed tax or have complicated income tax affairs.

Corporation tax is charged on a company's profits. If you trade as a limited company, ensure that paying this tax is as painless as possible.

National Insurance Contributions (NICs) are payable whether you are self-employed or employed by your own company, although different rates apply.

As well as your legal obligations, you’ll want to ensure that payroll is painless and that you use any opportunities to improve your tax-efficiency.

VAT

Effective VAT planning aims to ensure that VAT is relatively painless, and that you are reclaiming as much as possible of the VAT you pay.

Capital gains are made when you sell something for more money than you paid for it. As a result, you can be subject to tax. Take professional advice.

Business property taxes apply to businesses with commercial premises.There are two commercial property taxes: business rates and stamp duty land tax.

If you have tax problems or face a tax investigation, it pays to seek professional advice and you must act rather than just hoping for the best.

UK small businesses owed £32.1bn in late payments

18 July 2023

New research reveals that almost half of all invoices issued by sole traders and small firms were paid late in the past year, leaving many business owners struggling with cash flow.

Two new studies have highlighted the damage that late payments are doing to small businesses in the UK. A survey of over 1,000 SMEs by insurer Simply Business has found that UK small businesses are owed £32.1bn in late payments, with many planning to use personal savings to prop up their business while nearly a third of businesses are seeking bank loans.

Meanwhile, a new study by cloud accounting software company FreeAgent has found that 43% of all invoices sent by UK freelancers and small businesses in the past year (June 2022 - June 2023) were paid late. This represents a slight improvement since 2020, when 46% of UK invoices were paid late.

Businesses in jeopardy

Roan Lavery, ceo and co-founder of FreeAgent, said: "While it's certainly positive to see a slight drop in the level of late payment compared to 2020, it remains the case that around half of invoices are still not being paid on time. That represents a huge number of SME owners and freelancers whose businesses are unnecessarily being put in jeopardy.

"The vast majority of small businesses simply don't have the luxury of being able to absorb late payments into their accounts - they need to get paid promptly to keep themselves afloat … In our current volatile economic climate, and with business owners continuing to feel the impact of high inflation, interest rates and the cost of living crisis, it is more important than ever for them to be protected."

How to tackle the late payment crisis

A separate survey of small business owners by FreeAgent has identified some of the potential legislative solutions that SMEs would like to see implemented to tackle late payment in the UK:

  • Better access to legal aid and services (41% of respondents);
  • Harsher financial penalties for late payers (38%);
  • Mandating the Prompt Payment Code for all private sector contracts (34%);
  • An official star rating scheme to show how quickly companies pay their clients (31%).

In addition, 25% of business owners surveyed said they would like to see the government create a new, dedicated fund to protect small businesses from late or non-payers.

SME profits to fall in 2023

The latest SME Insights Report, published by Simply Business, has found that late payment is just one of several serious challenges facing small businesses:

  • 48% of SME owners say the rising cost of living is the biggest challenge;
  • 63% say that rising taxes, interest rates and inflation are eating into profit margins;
  • 26% of SMEs are now spending up to 40% more on energy each month compared to the previous year;
  • 52% of SMEs anticipate a decrease in profits by up to 20% in 2023, with customer retention (26%) and lack of funding (25%) cited as factors affecting business.

Worryingly, 26% of small business owners in the UK say that they may be forced to cease trading if the outlook for their business does not improve. However, 54% of businesses remain optimistic that the UK economy will improve this year, and SME confidence continues to grow as 77% express confidence about their business prospects over the next six months.

Written by Rachel Miller.

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