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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.
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.
If you are in business as a sole trader or in a partnership, you are liable for self-employed National Insurance (NI) contributions. That generally means paying flat-rate Class 2 NI and profit-related Class 4 NI.
You register to pay self-employed National Insurance contributions (NICs) as part of registering for tax self-assessment.
Class 4 and Class 2 NI contributions are due at the same time as income tax payments and are both collected through self-assessment -twice a year, by 31 January and 31 July.
You do not have to make Class 4 or Class 2 NICs if you are under 16 or have reached state pension age.
Class 4 NI contributions are based on your level of profits. You do not have to pay any Class 4 NI if your profits are below £8,424 in 2018/19 (£8,164 in 2017/18). You pay 9% Class 4 NI on profits from £8,424 to £46,350, and 2% on profits above that (£8,164 to £45,000 for 2017/18).
If you have more than one business, special rules can apply to the calculation of Class 4 NI contributions in some circumstances - for example, if one of your businesses makes a loss.
Class 2 NI contributions are charged at a flat weekly rate of £2.95 for 2018/19 (£2.85 a week, 2017/18) and affect your entitlement to some benefits, such as the state pension.
The small profits threshold applies if your earnings are small ie below £6,205 £6,025 for 2017/18). Where this is the case, no Class 2 NICs are payable and an exemption is no longer required.
The proposed plan to abolish Class 2 NICs has now been delayed to April 2019.