Running a business is difficult, no matter what size it is. For smaller companies, directors and managers often have to handle many areas at once, so you often lack the time to dedicate to all tasks.
Yet your small company Corporation Tax (CT) isn’t something you should ignore, as it’s a vital part of the well-being of your business and a legal requirement to keep on track and pay. As such, this is one area where it is worth seeking professional help. Not only can small business tax advice make light work of the various taxes your company has to pay, it can even save you money.
Which Taxes Does A Small Business Need To Pay?
The exact taxes you pay will, of course, depend on the nature of your business, but there are some specific taxes that you can expect to encounter.
If you’re a limited company, then you will need to consider your small business Corporation Tax implications. This is a tax on your taxable profits and financial income. This is where a lot of small companies struggle, as you have to determine your company’s liabilities and submit your CT return to HMRC.
Similarly, most companies will face some form of value added tax, or VAT, on the sales of various goods or services. The standard VAT rate is 20%, although some services have a reduced rate of 5%, while a few goods, such as children’s clothing, are VAT exempt. Knowing where and how your goods fit into the VAT system is vital for calculating your taxes correctly.
National Insurance Contributions (NIC) also apply, but these vary depending on if you’re a sole trader or a company employee (including the director), while the limited company itself is also required to pay its own contributions, known as employer’s NIC.
There may also be Stamp Duty and Capital Gains Taxes but, since these generally cover large values or even the transfer of land, it is not a tax small businesses tend to face.
Finally, if you hire employees, then there will be additional taxes. With PAYE, or Pay As You Earn, tax is normally taken directly from an employee’s payslip. However, as the ‘employing’ company, you have to provide HMRC with payroll records monthly, in addition to various other requirements.
We advise you seek professional advice in advance to ensure you are aware of the amount of tax to pay or how to minimise it.
The Benefits Of Tax Advice
Why do you need a tax adviser? Tax can seem confusing and complicated but fortunately, help is at hand. Perrigo Consultants is only a phone call away and our expert services can help with all of your needs.
To put it simply, a professional tax adviser and accountant knows the ins and outs of small business tax law and will ensure you’re paying the right amount of tax at the right time. Mistakes or errors in your tax affairs, such as miscalculating VAT, failing to account for tax deductible expenses or even filling out the wrong tax forms can be costly and could have legal implications with HMRC. From limited company accounts and property tax, to ensuring your payroll is declared correctly (and on time), there are many things that need to be taken care of. Not only will we make sure you’re not spending money unnecessarily, we also take a difficult, time-consuming task out of your hands.