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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.

Sole traders left struggling by the pandemic

17 August 2021

A new study suggests that sole traders may have been disproportionately impacted by COVID restrictions, with almost six in ten reporting that they are either not trading at all or are trading less than pre-COVID.

A survey by small business lender iwoca has found that 58% of sole traders (defined as those who are the exclusive owners of their businesses) are trading less than pre-COVID, compared to 43% of limited companies.

Worryingly, the results show that sole traders are twice as likely not to be trading at all, with 14% in this position compared to 7% of limited companies.

Other key findings of the poll show that:

  • 32% of sole traders said they were making fewer sales due to COVID-secure workplace measures, compared to 24% of limited companies;
  • 39% say they have fewer customers, compared to 29% of limited companies.

The research has also revealed that nearly half of business owners with sole trader status (46%) were concerned they'd struggle to afford their own wages in the next six months, compared to 37% of other small firms.

The study shows that time off work seems to have become a luxury that small business owners can't afford. Again, it is sole traders who are most affected, with 24% not even planning to take one day off in the next 12 months, compared to 13% of those in limited companies. The majority - 59% - plan to take less than ten days off in the next year.

"The pandemic has hit sole traders particularly hard," said Seema Desai, chief operating officer at iwoca. "We need our sole traders back on their feet - hopefully the lifting of restrictions will help them to recover, which will be great for them and also for the economy more broadly."

However, the Bank of England's Financial Stability Report, published in July, suggests that there may be hard times ahead for some of the UK's smallest businesses. It has warned that the SME sector is especially vulnerable as the economy emerges from COVID-19 restrictions and predicts that the end of VAT and rent deferrals could be "a catalyst for business distress".

Among the SME sectors most in distress are accommodation/food and transport/storage. The Bank of England report concludes that: "As the economy recovers and government support unwinds as planned, some businesses may face additional pressure on their cash flow and insolvencies could increase … Additionally, the end of the temporary ban on winding up petitions in September 2021 is likely to lead to an increase in insolvencies over the next twelve months."

Written by Rachel Miller.

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