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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.
VAT accounting schemes can make your life easier, simplifying your VAT accounting and in some cases improve your cash flow. If your taxable turnover of standard and reduced-rated supplies is below £1.35m (excluding VAT), or if you are involved in retail or selling second-hand goods, a VAT accounting scheme could suit you.
The flat rate VAT accounting scheme simplifies your VAT returns. Under this VAT accounting scheme, you simply calculate the VAT due to HM Revenue & Customs (HMRC) as a percentage of your turnover rather than paying the difference between the actual VAT you have charged and paid.
The flat rate used depends on your industry, but you should end up paying HMRC the same amount of VAT as if you had carried out the full VAT calculation. There is a 1% discount on the flat rate VAT if you use the scheme during your first year of VAT registration.
You are only eligible for this VAT accounting scheme if your estimated taxable turnover in the next year will be no more than £150,000. Once you are using the scheme, you can continue to do so until your total business income exceeds £230,000.
Normally, VAT returns are based on the tax point date (usually the same as the VAT invoice date) for your sales and purchases. This may mean you can end up having to pay HMRC the VAT due on sales that your customers have not yet paid for.
The VAT cash accounting scheme instead bases the return on payment dates, both for purchases and sales. You will need to ensure your VAT records include a record of actual payment dates.
You are only eligible for the VAT cash accounting scheme if your estimated taxable turnover is no more than £1.35m, and can then stay in the scheme as long as it remains below £1.6m.
The annual accounting scheme allows you to pay VAT on account, in either nine monthly or three quarterly payments. You then complete a single, annual VAT return which is used to work out any balance owed by you or due from HMRC.
Again, this simplifies your VAT paperwork. You are only eligible for the scheme if your estimated taxable turnover is no more than £1.35m, and can then stay in the scheme as long as it remains below £1.6m.
If eligible, you may be able to combine the annual accounting scheme with the flat rate VAT and VAT cash accounting schemes.
Various retail schemes exist to simplify VAT. The right scheme for you depends on whether your retail turnover (excluding VAT) is below £1m, between £1m and £130m or higher.
Smaller businesses may be able to use a retail scheme with cash accounting and annual accounting. You cannot combine a retail scheme with the flat rate VAT scheme, but retailers can choose to use the flat rate scheme instead.
Separately, there are VAT margin schemes for businesses that deal in second-hand goods, art or similar goods, as well as a special tour operators' margin scheme.
As with flat rate VAT and VAT cash accounting, you may want to take advice to see which accounting schemes would best suit your circumstances.