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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.

Small firms on the brink as cost of living crisis bites

21 March 2023

New research has found that almost one million SMEs have £1,000 or less saved to help them stay afloat in the event of a decline in revenue.

A new study by Yell has found that 17% of UK small businesses have just £1,000 or less in savings. The survey of 500 leaders of SME businesses also reveals that one in ten say they aren't confident their business will still be afloat in six months' time and 13% say they are not confident that they will still be trading 12 months' from now.

The key findings of the Yell study show that:

  • 10% of SMEs say they can't save anything each month at the moment;
  • A further 9% are only able to save up to £200 per month;
  • One in three sole traders aren't saving anything at all.

Commenting on the findings, Connor Campbell, business finance expert at NerdWallet, said: "Cutting costs without sacrificing quality is a balancing act. Whenever you look to make a saving, you should ask yourself whether it will materially impact the quality of your service or product. If it will, those savings may lead to greater losses down the line."

Mark Clisby, co-ceo at Yell, said: 'This feedback from UK SMEs is a good reminder of the importance of regularly reviewing where to invest and where to make savings. Quite often, a common reaction can be to cease marketing activity, but time and again we see this as a counterproductive option. Marketing is required to bring in new customers and keep revenue coming in."

Instead of cutting back on marketing, Connor Campbell recommends that small businesses first look at switching suppliers, renegotiating deals, reviewing costs and increasing prices. "Where businesses have cut all the costs they can, the most important thing is to then minimise exposure to risk. For example, locking in contracts for longer periods of time is one way of doing this."

Risk of business closures

Many businesses are at risk of closure, according to a survey of 500 small business owners by Nucleus Commercial Finance has found that an estimated 275,000 UK SMEs are at risk of closing due to economic volatility this year. Rising costs is the key issue, with 83% of businesses reporting that their costs have risen and they expect them to rise further.

How SMEs are dealing with rising costs

  • 35% are increasing the price of their products and services;
  • 23% are delaying planned investment in technology or infrastructure;
  • 16% are shelving their growth ambitions;
  • 14% have delayed investment in staff training and development;
  • 13% are asking employees to work more from home;
  • 13% are reducing staff hours;
  • 12% are reducing staff numbers;
  • 11% are instigating a promotion/ hiring freeze;
  • 9% are reducing staff perks;
  • 5% are reducing their contribution to employee pensions.

Source: Nucleus Commercial Finance

The Recovery Loan Scheme

A recent survey conducted by Opinium for Novuna Business Cash Flow has found that many small business owners are unaware that the government's Recovery Loan Scheme (RLS) is still available.

The RLS was introduced by the UK government in 2020 to help businesses affected by the pandemic; it currently offers financial support in the form of loans of up to £2 million and is set to run until 30 June 2024. The findings show that just 5% of sole traders and 50% of micro-business owners (with 1-9 employees) are aware the scheme is still running.

Written by Rachel Miller.

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