Business Tax Accountants & Advice

Buying a car through a limited company can offer significant tax advantages and financial benefits. However, there are various considerations and legal aspects that you must keep in mind to ensure compliance and maximise savings.

The deadline for filing Self Assessment is 31 January following the tax year end. For example, the deadline for the 2020/2021 tax year is 31 January 2022.

Payments for your tax bill are due on 31st January after the end of the relevant tax year. If you're making payments on account, there are two payments due each year on 31st January and 31st July.

Most businesses can register for VAT online, or appoint an accountant or agent to complete your registration and deal with HMRC.

There are certain instances where you must register by post. You should use the form VAT1 if you want to apply for a ‘registration exception', are joining the Agricultural Flat Rate Scheme or if you're registering the divisions or business units of a body corporate under separate VAT numbers.

Refer to the HMRC website for information on when you need to register by post using the form VAT1A, VAT1B or VAT1C.

Starting a business is an exciting and daunting prospect. It can be difficult to know where to start and what to do first. One of the most important things to consider is the VAT rate you will need to charge your customers. Knowing your VAT rate is essential for any business in the UK, and it is important to understand how to find it.

VAT stands for Value Added Tax and is a tax that is charged on goods and services that are sold in the UK. It is a form of indirect taxation, meaning that it is paid by the consumer rather than the business. The UK government sets the standard VAT rate at 20%, but there are some exceptions.

The first step to finding your VAT rate is to work out which category your business falls into. The UK government divides businesses into two categories: standard-rated and exempt. Standard-rated businesses are those that charge the standard rate of 20%, while exempt businesses are those that do not charge VAT at all.

Once you have worked out which category your business falls into, you can then determine your VAT rate. If your business is standard-rated, you will need to charge the standard rate of 20%. If your business is exempt, you will not need to charge VAT at all.

It is important to note that there are some exceptions to the standard rate. If you are selling certain goods or services, you may be able to charge a reduced rate of 5% or 0%. This includes items such as children’s clothes, books, and newspapers. You can find out more about the reduced rate of VAT on the UK government website.

It is also important to remember that you may need to register for VAT if your business turnover exceeds a certain amount. The current threshold is £85,000, so if your turnover is above this amount, you will need to register for VAT. You can find out more about registering for VAT on the UK government website.

Once you have worked out your VAT rate, you will need to ensure that you are compliant with the law. This means that you must charge the correct amount of VAT on all of your sales. You must also keep accurate records of all of your sales and purchases, and submit your VAT returns on time.

In conclusion, it is important to understand how to find your VAT rate when you are setting up a business in the UK. You must determine which category your business falls into, and then determine the correct rate of VAT to charge. You may also need to register for VAT if your turnover exceeds a certain amount. Finally, you must ensure that you are compliant with the law by charging the correct amount of VAT and keeping accurate records.

A tax period refers to a period prescribed by a governmental authority for which a tax return is required to be filed, or a tax is required to be paid.

Tax periods are the timeframes in which businesses must pay their taxes. In the UK, businesses must pay taxes on income, profits, and capital gains. The tax period is the period of time over which the taxes are calculated and paid.

For businesses operating in the UK, tax periods are usually divided into three main types: annual, quarterly, and monthly. The type of tax period you choose will depend on the size and type of your business.

Annual tax periods are the most common type of tax period in the UK. This type of tax period is used for businesses that make more than £85,000 in profits in a year. With an annual tax period, businesses must pay their taxes on a yearly basis.

Quarterly tax periods are used for businesses that make between £85,000 and £1.5 million in profits in a year. With a quarterly tax period, businesses must pay their taxes on a quarterly basis.

Monthly tax periods are used for businesses that make more than £1.5 million in profits in a year. With a monthly tax period, businesses must pay their taxes on a monthly basis.

The tax period for a business will depend on the size and type of the business. For example, businesses that are registered for VAT (Value Added Tax) must pay their taxes on a quarterly basis, regardless of the size of their business.

In addition to the three main types of tax periods, there are also special tax periods. These are used for businesses that have specific needs or circumstances. For example, businesses that are registered for corporation tax must pay their taxes on a quarterly basis, regardless of the size of their business.

When setting up a business, it is important to understand the different types of tax periods and how they apply to your business. This will help you to plan for and manage your tax obligations.

It is also important to note that the tax period for a business may change over time. For example, if a business grows and its profits exceed £1.5 million, it may be required to switch to a monthly tax period.

Tax periods are an important part of running a business in the UK. Understanding the different types of tax periods and how they apply to your business is essential for managing your tax obligations.

There are various ways to pay your VAT bill.

Online or telephone banking (Faster Payments) and CHAPS payments are processed on the same day or the next working day.

Direct Debit, Bacs payments, standing order (only for businesses using the Annual Accounting Scheme or Payments on Account), online payments (by debit or corporate credit card) or payments made at your bank or building society are processed on a three day cycle.

When starting a business in the UK, it is important to understand your tax status. This is because it will determine how much tax you need to pay and the type of tax you will be liable for. Knowing your tax status can also help you plan for the future and ensure that you are compliant with the law.

In this article, we’ll explain how to find your tax status in the UK. We’ll cover the different types of taxes you may be liable for, how to register for taxes, and how to check your tax status.

Types of Taxes

The first step to finding your tax status is to understand the different types of taxes that you may be liable for. In the UK, there are three main types of taxes: income tax, corporation tax, and value added tax (VAT).

Income tax is a tax on your income, such as wages, salaries, and profits from self-employment. Corporation tax is a tax on the profits of companies. Value added tax (VAT) is a tax on goods and services.

Registering for Taxes

The next step is to register for the taxes that you are liable for. To register for income tax, you need to register with HM Revenue & Customs (HMRC). To register for corporation tax, you need to register with Companies House. To register for VAT, you need to register with HMRC.

Once you have registered for taxes, you will be given a unique taxpayer reference (UTR) number. This number is used to identify you to HMRC and is important for filing your tax returns.

Checking Your Tax Status

Once you are registered for taxes, you can check your tax status. To do this, you need to log in to your HMRC online account. Once you are logged in, you will be able to view your tax status, including the taxes you are liable for and the amount of tax you owe.

You can also view your tax returns and any correspondence from HMRC. This is important for ensuring that you are compliant with the law and paying the correct amount of tax.

Conclusion

Finding your tax status in the UK is an important part of setting up a business. It is important to understand the different types of taxes you may be liable for and to register for them. Once you are registered, you can check your tax status and view your tax returns. This will help you to ensure that you are compliant with the law and paying the correct amount of tax.

A completed VAT Return will either show how much is owed to HMRC or whether you're due a refund.

VAT Returns are an important part of running a business in the United Kingdom. Every business that is registered for VAT must submit a VAT Return to HMRC (Her Majesty's Revenue and Customs) on a regular basis. This is a form that details the amount of VAT that a business has collected and paid during a specific period of time. It is important to understand what VAT Returns are and how to complete them correctly in order to ensure that your business complies with the law and avoids any penalties.

What is a VAT Return?

A VAT Return is a form that is submitted to HMRC on a regular basis. It details the amount of VAT that a business has collected and paid during a specific period of time. This period of time is usually a quarter, although some businesses may be required to submit a return more frequently. The VAT Return must be completed accurately and submitted to HMRC by the due date in order for the business to remain compliant with the law.

What information is included in a VAT Return?

The information that is included in a VAT Return depends on the type of VAT scheme that the business is registered for. The most common type of VAT scheme is the Standard VAT Scheme, which requires the following information to be included:

• The total amount of VAT due from sales
• The total amount of VAT due from purchases
• The total amount of VAT due from imports
• The total amount of VAT due from exports
• The total amount of VAT due from other sources
• The total amount of VAT due from adjustments
• The total amount of VAT due from bad debts
• The total amount of VAT due from corrections
• The total amount of VAT due from reclaims
• The total amount of VAT due from refunds
• The total amount of VAT
  

"According to HMRC, you can claim trading allowance if you have trading income from:

• Self-employment
• Casual services
• Hiring personal equipment

You can claim the property allowance if you have income from land or property.

You won't be able to claim the allowances if you have trade or property income from:

- A business that you or an individual connected to you owns or controls

- A partnership where you or individuals connected to you are partners

- Your employer, or your spouse's or civil partner's employer

You can't claim the property allowance if claim:

- Claim the tax reducer for finance costs such as mortgage interest for a residential property

- Deduct expenses from income from letting a room in your own home, instead of using the Rent a Room Scheme"

To get tax-free childcare, you need to:

• Check your eligibility for tax-free childcare
• Check if it's the right option for you
• Apply online for tax-free childcare
• Sign in to your account to make payments to your childcare provider
• Sign in to your account to reconfirm that your details every three months

The National Insurance number is a number used in the administration of the National Insurance or social security system. It is unique to each individual, and helps ensure that the National Insurance contributions and tax you pay are properly recorded against your name.

National Insurance numbers are a unique nine-digit code that is assigned to all UK citizens and residents. They are used to identify individuals for tax and social security purposes. They are also used to track and calculate contributions to the UK's National Insurance system, which is a form of social security.

For those who are setting up a business or have recently started a business in the UK, it is important to know what National Insurance numbers are and why they are important. This article will provide an overview of National Insurance numbers and how they are used to help businesses.

What is a National Insurance Number?

A National Insurance number is a nine-digit code that is assigned to all UK citizens and residents. It is used to identify individuals for tax and social security purposes. It is also used to track and calculate contributions to the UK's National Insurance system.

The National Insurance system is a form of social security, which provides financial protection to individuals and their families in the event of illness, unemployment, or death. It also helps to fund the state pension and other benefits.

Why Do Businesses Need to Know About National Insurance Numbers?

Businesses need to know about National Insurance numbers for a few reasons. Firstly, they are required to deduct National Insurance contributions from their employees' wages. This money is then paid to HM Revenue & Customs (HMRC).

Secondly, businesses need to know about National Insurance numbers in order to ensure that their employees are eligible for certain benefits, such as the state pension.

Finally, businesses need to know about National Insurance numbers in order to accurately report their employees' earnings to HMRC. This is important for tax purposes.

How Do Businesses Obtain National Insurance Numbers?

Businesses can obtain National Insurance numbers for their employees by registering with HMRC. They will then receive a National Insurance number for each employee.

It is important to note that businesses must keep records of their employees' National Insurance numbers. This is to ensure that they are paying the correct amount of National Insurance contributions.

Conclusion

National Insurance numbers are a unique nine-digit code that is assigned to all UK citizens and residents. They are used to identify individuals for tax and social security purposes. They are also used to track and calculate contributions to the UK's National Insurance system.

For those who are setting up a business or have recently started a business in the UK, it is important to know what National Insurance numbers are and why they are important. Businesses need to know about National Insurance numbers in order to deduct National Insurance contributions from their employees' wages, ensure that their employees are eligible for certain benefits, and accurately report their employees' earnings to HMRC. Businesses can obtain National Insurance numbers for their employees by registering with HMRC.

Tax incentive benefits are a great way to help businesses save money and increase their profits. In the UK, there are a number of tax incentives available to businesses, depending on their size and type of business. In this article, we will look at how you can receive a tax incentive benefit in the UK.

First, it is important to understand what a tax incentive benefit is. A tax incentive benefit is a government-sponsored program that encourages businesses to invest in certain activities, such as research and development, or to hire more employees. In return, the business can receive a tax break or credit.

The UK government offers a number of tax incentives to businesses, depending on their size and type of business. For example, small businesses may be eligible for the Small Business Rate Relief Scheme, which provides a discount on business rates. There are also other tax reliefs available, such as the Research and Development Tax Credit and the Employment Allowance.

In order to receive a tax incentive benefit, you must first determine which type of tax incentive is best suited to your business. You should also consider the size of your business and the type of activities you are undertaking.

Once you have identified the type of tax incentive that is best suited to your business, you should contact your local tax office to discuss the details. They will be able to provide you with more information about the tax incentive and help you to determine if you are eligible.

In addition to contacting your local tax office, you should also consider speaking to an accountant or tax advisor. They will be able to provide you with advice on the best way to receive a tax incentive benefit and how to make the most of it.

Once you have determined the type of tax incentive that is best suited to your business, you should then apply for the tax incentive. This can be done online or by post. You will need to provide information about your business, such as its size and type of activities, as well as details of any tax reliefs you are eligible for.

Once you have applied for the tax incentive, you should then wait for the results. The tax office will usually provide you with a letter or email confirming whether or not you are eligible for the tax incentive.

Once you have received the letter or email confirming your eligibility, you should then contact your local tax office to discuss the details of the tax incentive. They will be able to provide you with more information about how to receive the tax incentive benefit and how to make the most of it.

Finally, you should ensure that you keep up to date with any changes to the tax incentive scheme. This is important, as the tax office may make changes to the scheme at any time.

In conclusion, receiving a tax incentive benefit in the UK is a great way to help businesses save money and increase their profits. It is important to understand the type of tax incentive that is best suited to your business and to contact your local tax office for more information. Once you have applied for the tax incentive, you should then wait for the results and contact your local tax office to discuss the details. Finally, you should ensure that you keep up to date with any changes to the tax incentive scheme.

Capital allowance is an expenditure you can claim on assets you purchase for use in your business.

In addition to the purchase of business assets, you can also claim capital allowances for renovating business premises in disadvantaged areas in the UK, extracting minerals, research and development, patents and more. Further information can be found on the HMRC website.

You can register for VAT online through creating a VAT online account (also known as the 'Government Gateway' account). You'll need your online account to submit your VAT returns.

How you pay your National Insurance contributions depends on your employment status.

If you're an employee, your National Insurance contributions are deducted from your wages before you receive your salary. Your contributions are reflected in your payslip.

If you're a limited company director, you may also be an employee (at your own company). As such, you pay Class 1 National Insurance through your PAYE payroll.

If you're self-employed, you pay Class 2 and Class 4 National Insurance depending on your profits. The majority of self-employed workers pay National Insurance through Self Assessment.

If you're employed and self-employed, your Class 1 National Insurance will be deducted through your wages. You may also need to pay Class 2 and Class 4 National Insurance depending on your self-employed profits.

If you’re setting up a business in the UK, you’ll need to register for Value Added Tax (VAT). Once you’ve registered, you’ll be assigned a VAT number which you’ll need to include on all invoices and other financial documents. In this article, we’ll look at how to find your VAT number if you’ve already registered.

As a self-employed person, you're not required to make a separate claim for a tax refund, as you can [claim it through your Self Assessment tax return](https://www.gov.uk/self-assessment-tax-returns/corrections#:~:text=To claim a refund%2C go,for a payment on account).).

If you've overpaid your payments on account, you can request a refund by completing form SA303.

If you've made a mistake on your Self Assessment tax return, you need to amend or correct the return using the Self Assessment portal. You may be asked to show proof of evidence.

There are various ways to pay your Self Assessment Tax bill.

Same or next day

• online or telephone banking (Faster Payments)
• CHAPS
• by debit or corporate credit card online
• at your bank or building society

You need a paying-in slip from HMRC to pay at a bank or building society.

3 working days

• Bacs
• Direct Debit (if you've set one up with HMRC before)
• by cheque through the post

5 working days

• Direct Debit (if you have not set one up with HMRC before)

Self Assessment threshold change From tax year 2023 to 2024 onwards, the Self Assessment threshold for customers taxed through PAYE only, will change from £100,000 to £150,000.

Child benefit is a series of welfare payments and tax credits made to parents or individuals who are responsible for bringing up a child.

Child benefits are a form of financial support provided by the UK government to help families with the cost of raising children. The payments are made to the main carer of the child and are usually paid every four weeks. The amount of money received depends on the number of children in the family and the family’s income.

Child benefits are designed to help families with the cost of raising children, and can be used for anything from buying food and clothing to paying for childcare. The money can also be used to pay for activities such as swimming lessons or school trips.

Child benefits are available to families with children aged 16 or under, or up to 20 if the child is in full-time education or training. The amount of money received depends on the number of children in the family and the family’s income.

Child benefits are paid every four weeks and can be paid directly into the carer’s bank account or collected from a post office. The money is paid in arrears, so it is important to keep track of when payments are due.

For those who are setting up a business or have only just started a business, child benefits can be a great help in covering the costs of raising a family. The money can be used to pay for childcare, food, clothing, and other necessities. It can also be used to pay for activities such as swimming lessons or school trips.

Child benefits are paid to the main carer of the child, so it is important to make sure that the main carer is registered with the Child Benefit Office. The main carer can be either the mother or the father, but if the parents are not married or in a civil partnership, the mother must be the one to register.

The amount of money received depends on the number of children in the family and the family’s income. The amount of money received is also affected by whether the main carer is in work and how much they earn.

For those who are setting up a business or have only just started a business, it is important to make sure that the main carer is registered with the Child Benefit Office. This will ensure that the family receives the right amount of money and that the payments are made on time.

In addition to child benefits, there are other forms of financial support available to families with children. These include tax credits, Universal Credit, and Childcare Vouchers. It is important to research all of the options available to ensure that the family is getting the best deal.

In conclusion, child benefits are a form of financial support provided by the UK government to help families with the cost of raising children. The payments are made to the main carer of the child and are usually paid every four weeks. For those who are setting up a business or have only just started a business, child benefits can be a great help in covering the costs of raising a family. It is important to make sure that the main carer is registered with the Child Benefit Office and to research all of the other forms of financial support available.

PAYE, or Pay As You Earn refers to a method of paying income tax and national insurance contributions.

PAYE (Pay As You Earn) is a system used by employers in the UK to deduct income tax and National Insurance contributions from their employees’ salaries. It is administered by HM Revenue & Customs (HMRC) and is the most common way of collecting tax from employees. It is also the most efficient way of collecting tax, as it ensures that the right amount of tax is deducted from each employee’s salary.

For those who are starting a business in the UK, it is important to understand how PAYE works and what your responsibilities are as an employer. This article will explain what PAYE is, how it works, and how to set it up.

What is PAYE?

PAYE stands for Pay As You Earn and is a system used by employers to deduct income tax and National Insurance contributions from their employees’ salaries. It is administered by HM Revenue & Customs (HMRC) and is the most common way of collecting tax from employees.

Under the PAYE system, employers are responsible for deducting the correct amount of tax from their employees’ salaries. This is done through the use of a PAYE tax code, which is a number assigned to each employee. The tax code is used to calculate how much tax should be deducted from the employee’s salary.

How Does PAYE Work?

The PAYE system works by deducting tax from employees’ salaries before they are paid. This means that the employee receives the net amount of their salary, after the tax has been deducted.

The amount of tax that is deducted depends on the employee’s tax code. This code is determined by HMRC and is based on the employee’s income and other factors such as their age and whether they are married.

The employer is responsible for deducting the correct amount of tax from the employee’s salary, based on their tax code. The employer then pays the tax to HMRC on behalf of the employee.

How to Set Up PAYE

If you are starting a business in the UK, you will need to set up a PAYE system for your employees. This involves registering with HMRC as an employer and setting up a PAYE scheme.

When setting up a PAYE scheme, you will need to provide HMRC with details about your business, such as your company name and address. You will also need to provide details about your employees, such as their name, address and date of birth.

Once you have registered with HMRC, they will send you a PAYE reference number, which you will need to use when setting up your PAYE scheme.

Once you have set up your PAYE scheme, you will need to make sure that you deduct the correct amount of tax from your employees’ salaries. This is done by using the employee’s tax code, which is determined by HMRC.

You will also need to pay the tax that you have deducted from your employees’ salaries to HMRC. This is done through a process called ‘real time information’ (RTI), which is a system used by employers to send HMRC information about their employees’ pay and deductions.

Conclusion

PAYE is a system used by employers in the UK to deduct income tax and National Insurance contributions from their employees’ salaries. It is administered by HM Revenue & Customs (HMRC) and is the most common way of collecting tax from employees.

For those who are starting a business in the UK, it is important to understand how PAYE works and what your responsibilities are as an employer. This article has explained what PAYE is, how it works, and how to set it up.

You can reclaim VAT by submitting a VAT return.

You need to have valid VAT invoices, keep records as proof for your claim and show how you calculated the business proportion of a purchase.

If you're in the UK and dealing with taxation, you might have come across the term "UTR Number." This guide by GoForma aims to simplify the process of finding your Personal Unique Taxpayer Reference (UTR) number, an essential identification for tax-related matters.

You'll first need to check that you're eligible for the VAT Flat Rate Scheme.

If you're eligible, you can join the scheme online when you register for VAT, or submit the VAT600 FRS through one of the methods below:

• By email to frsapplications.vrs@hmrc.gsi.gov.uk
• By post to:

BT VAT

HM Revenue and Customs

BX9 1WR

You'll receive notification that you've joined the scheme through your VAT online account, or by post if you did not apply online.

Starting a business in the UK can be an exciting and rewarding experience, but it also comes with a lot of responsibilities. One of the most important things to consider is how to pay HMRC early. This is because HMRC is responsible for collecting taxes from businesses in the UK, and it is important to pay them on time and in full.

Paying HMRC early is a great way to ensure that your business is compliant with UK tax laws and regulations. It also helps to reduce the amount of interest and penalties that may be charged if you fail to pay on time. In this article, we will discuss how to pay HMRC early so that you can stay on top of your tax obligations.

The first thing to consider when paying HMRC early is to make sure that you have all the necessary information. This includes your business registration number, the amount of tax due, and the due date. You will also need to provide your contact details so that HMRC can contact you if there are any queries.

Once you have all the necessary information, you can then decide how you want to pay HMRC. The most common way to pay HMRC is by direct debit. This is a convenient and secure way to pay your taxes, as it allows you to set up a regular payment schedule. You can also pay HMRC by cheque, credit card, or online banking.

If you choose to pay HMRC by direct debit, you will need to fill out a Direct Debit Mandate form. This form will include your bank details and the amount of money that you want to pay HMRC each month. Once you have completed the form, you will need to send it to HMRC.

You can also pay HMRC early by cheque. This is a more traditional way to pay your taxes, but it can be more time consuming. You will need to write a cheque for the amount of tax due and send it to HMRC. It is important to make sure that you include your business registration number on the cheque so that HMRC can identify the payment.

If you choose to pay HMRC by credit card, you will need to fill out a credit card payment form. This form will include your credit card details and the amount of money that you want to pay HMRC. Once you have completed the form, you will need to send it to HMRC.

Finally, you can also pay HMRC early by online banking. This is the most convenient way to pay your taxes, as it allows you to make payments quickly and securely. You will need to log in to your online banking account and select the ‘Pay HMRC’ option. You will then need to enter the amount of money that you want to pay HMRC and the due date.

Paying HMRC early is an important part of running a business in the UK. It helps to ensure that you are compliant with UK tax laws and regulations and helps to reduce the amount of interest and penalties that may be charged if you fail to pay on time. By following the steps outlined above, you can easily pay HMRC early and stay on top of your tax obligations.

If you’re a business owner in the UK, you’ve probably heard of Value Added Tax (VAT). It’s a tax that is added to the cost of goods and services, and it’s collected by the government. One of the most important things to know as a business owner is when you need to pay your VAT. Knowing your VAT quarter is key to ensuring you stay compliant with the law and don’t end up with hefty fines. So, how do you find your VAT quarter?

The first thing you need to do is to determine when your VAT quarter begins. This is based on when you registered for VAT. If you registered for VAT on the 1st of January, for example, your VAT quarter will begin on the 1st of January. If you registered for VAT on the 15th of February, your VAT quarter will begin on the 15th of February.

Once you know when your VAT quarter begins, you can then work out when it ends. The end of your VAT quarter is always the last day of the month in which you registered for VAT. For example, if you registered for VAT on the 15th of February, your VAT quarter will end on the 28th of February (or 29th if it’s a leap year).

You can also use the HMRC’s online VAT calculator to work out your VAT quarter. All you need to do is enter your VAT registration date and the calculator will tell you when your VAT quarter begins and ends. This can be a useful tool if you’re unsure of when your VAT quarter begins and ends.

Once you know when your VAT quarter begins and ends, you can then work out when you need to pay your VAT. If you’re registered for the standard VAT scheme, you’ll need to make a payment to HMRC by the end of the month following the end of your VAT quarter. So, if your VAT quarter ends on the 28th of February, you’ll need to make your payment to HMRC by the end of March.

If you’re registered for the flat rate scheme, you’ll need to pay HMRC by the end of the month following the end of your VAT quarter. So, if your VAT quarter ends on the 28th of February, you’ll need to make your payment to HMRC by the end of March.

It’s important to note that you’ll need to make sure you have enough funds in your bank account to cover the payment. If you don’t, you may be charged a late payment penalty.

Finding your VAT quarter can seem like a daunting task, but it doesn’t have to be. By following the steps outlined above, you’ll be able to easily determine when your VAT quarter begins and ends, as well as when you need to make your payment to HMRC.

You can claim Entrepreneurs' Relief on your annual Self Assessment tax return, under the 'Capital Gains Summary' section.

It is also possible to claim the relief on the sale of other assets which are not shares. The rules on this are different and it is best to discuss your individual case with a qualified accountant.

You should charge VAT when your business becomes VAT registered-whether the registration is mandatory or voluntary.

VAT registration is mandatory when:

• your VAT taxable turnover exceeds the current threshold of £85,000 (for a 12-month period ending in 2020/21). The VAT taxable turnover refers to the total value of everything that you sell that isn't exempt from VAT.
• you expect your VAT taxable turnover to exceed £85,000 in the next 30-day period
• your business had a taxable turnover exceeding £85,000 over the last 12 months

If you're thinking about registering for VAT voluntarily, these are the main benefits and downsides you should consider:

Benefits:

• It enhances the perception of your business
• Able to reclaim VAT

Downsides:

• Administrative burden
• It makes your goods or services seem more expensive
• You may be faced with an unexpected VAT bill

You can reduce your corporation tax bill by:

• Claiming your business expenses
• Paying yourself a salary
• Taking advantage of HMRC's incentives for early tax payment
• Taking advantage of tax allowances and reliefs

The corporation tax rate for the 2020/21 financial year is 19%. The corporation tax rates for previous years are listed on the [HMRC website](https://www.gov.uk/government/publications/rates-and-allowances-corporation-tax/rates-and-allowances-corporation-tax#:~:text=At Budget 2020%2C the government,2021 would remain at 19%.).

A unique taxpayer reference (UTR) number is a ten-digit code that's unique to you or your company. It's intended to identify you or your business personally with HMRC for anything and everything that has to do with your tax obligations.

A Self Assessment (or Self Assessment tax return) is a form that business owners are required to submit to HMRC every year. It details how much you've earned and your sources of income, which enables HMRC to work out the Income Tax and National Insurance you need to pay.

The deadline for paying HMRC submitting your VAT return online are usually the same-one calendar month and seven days after the end of an accounting period.

VAT, or Value Added Tax, is a tax that is applied to goods and services in the UK. It is a type of indirect tax, which means that it is collected by businesses from their customers and then paid to HMRC. In the UK, the standard rate of VAT is 20%.

For those who are just starting a business, or are looking to set up a business, it is important to understand when you need to pay VAT and how it works. This article will explain when you need to pay VAT and how to go about doing so.

When Do I Need to Pay VAT?

If your business is registered for VAT, then you will need to pay VAT on all goods and services that you supply to customers. This includes sales of goods, services and digital products. You will also need to pay VAT on any goods or services that you purchase from other businesses.

In order to register for VAT, your business must have a taxable turnover of more than £85,000 in the last 12 months. If your business is below this threshold, then you do not need to register for VAT. However, you may still choose to do so if you think it will be beneficial for your business.

How Do I Pay VAT?

Once you are registered for VAT, you will need to submit a VAT return to HMRC every quarter. This return will include details of all the sales and purchases that you have made in the previous quarter, as well as the amount of VAT that is due.

You can submit your VAT return online, or you can use HMRC’s VAT helpline. You will need to pay the amount of VAT that is due within 30 days of the end of the quarter. If you do not pay the VAT on time, then you may be liable for a penalty.

What Are the Different Types of VAT?

In the UK, there are three different rates of VAT. The standard rate is 20%, but there are also reduced rates of 5% and 0%. The reduced rates apply to certain goods and services, such as energy-saving materials, children’s car seats and books.

In addition, there are two other types of VAT: the Flat Rate Scheme and the Cash Accounting Scheme. The Flat Rate Scheme is a simplified way of calculating VAT, while the Cash Accounting Scheme allows you to pay VAT on goods and services when you receive payment, rather than when you make the sale.

Conclusion

VAT is an important part of running a business in the UK. If your business is registered for VAT, then you will need to pay VAT on all goods and services that you supply to customers. You will also need to submit a VAT return to HMRC every quarter and pay the amount of VAT that is due within 30 days. There are three different rates of VAT, as well as two other schemes that you may be eligible to use. It is important to understand when and how to pay VAT in order to ensure that your business is compliant with the law.

The drawbacks of VAT registration are:

• Administrative burden. As a VAT-registered business, there are VAT rules and record keeping requirements you'll need to comply with.
• It makes your goods or services seem more expensive. Charging VAT can make your goods and services more expensive-and therefore less appealing, particularly if your customers or clients are not VAT-registered business, or are end consumers who aren't able to reclaim VAT.
• You may be faced with an unexpected VAT bill. If your output VAT is higher than the input VAT, as it nearly always will be, then you need to pay the difference to HMRC. This can create cash flow issues if you're unprepared for an unexpected VAT bill.

The advantages of VAT registration are:

• It enhances the perception of your business: Registering for VAT tends to lend credibility to your business, and makes your company appear larger and more established.
• You can reclaim VAT: You can reclaim VAT on goods and services you've purchased from other businesses, and this can be advantageous in certain situations.

You need to register for VAT if:

• your VAT taxable turnover exceeds the current threshold of £85,000 (for a 12-month period ending in 2020/21). The VAT taxable turnover refers to the total value of everything that you sell that isn't exempt from VAT.
• you expect your VAT taxable turnover to exceed £85,000 in the next 30-day period
• your business had a taxable turnover exceeding £85,000 over the last 12 months

You need to register for VAT within 30 days of fulfilling any of these conditions.

Whether or not VAT should be charged on your sales to your overseas clients all depends on what HMRC refers to as the place of supply of your services.

Generally, if your client is a business customer, the place of supply will be where the client is based but if they are a non-business customer, the place of supply will be where you are based.

For most contractors, this means that your place of supply is generally where your customer is based.

If your place of supply is in another EU country, you do not need to charge UK VAT - providing they are a registered business in their country. You will need to request their VAT registration number and display this on your invoices. It will also need to be reported to HMRC within your VAT return and a separate EC sales list.

If your place of supply is in a country other than the EU then you do not need to charge VAT as it is outside the scope of VAT entirely. No further actions are needed for this other than not including VAT on your invoices.

If you are looking to check if you need to charge VAT or need assistance with any other VAT matters, contact one of our VAT experts today.

Employers who purchase bicycles and safety equipment for loan to employees can benefit from treating the purchase as capital expenditure eligible for corporation tax relief. VAT can also be claimed back on the purchase unless you are registered on the VAT flat rate scheme.

The loan of bicycles and safety equipment under the cycle to work scheme removes any tax charge to the employee that would usually arise on a taxable benefit.

The advantages of VAT registration are:

• It enhances the perception of your business: Registering for VAT tends to lend credibility to your business, and makes your company appear larger and more established.
• You can reclaim VAT: You can reclaim VAT on goods and services you've purchased from other businesses, and this can be advantageous in certain situations.

The drawbacks of VAT registration are:

• Administrative burden. As a VAT-registered business, there are VAT rules and record keeping requirements you'll need to comply with.
• It makes your goods or services seem more expensive. Charging VAT can make your goods and services more expensive-and therefore less appealing, particularly if your customers or clients are not VAT-registered business, or are end consumers who aren't able to reclaim VAT.
• You may be faced with an unexpected VAT bill. If your output VAT is higher than the input VAT, as it nearly always will be, then you need to pay the difference to HMRC. This can create cash flow issues if you're unprepared for an unexpected VAT bill.

As a limited company director, there are various allowable business expenses you can claim for. These include (and aren't limited to):

• Pension contributions
• Staff expenses
• Business mileage
• Mobile phone, landline and broadband expenses
• Costs of forming your company

Further information on the types of expenses you can claim for can be found in our limited company expenses and tax allowances guide.

As a contractor, how you pay yourself will vary depending on whether your contract is subject to IR35.

• Contract subject to IR35 (inside): Salary
• Contract not subject to IR35 (outside): Salary, dividends + reimbursing any expenses you have paid for out of your own pocket

We've provided a more detailed explanation in our Forma Help Center limited company outside IR35 take home pay calculator.

VAT is a type of consumption tax added to the cost of most goods and services for both B2C and B2B markets. There are three rates of VAT: standard rate, reduced rate and zero rate. VAT is not charged on exempt or out-of-scope items.

As a small business owner or self-employed worker, there are a few key aspects you need to understand about VAT. These are:

• When is VAT registration mandatory?
• If I'm considering voluntary VAT registration, what are the benefits and downsides I need to consider?
• How do I register for VAT?
• What do I need to do after I've registered for VAT?
• VAT accounting schemes

We explain these in greater detail in our VAT guide.

A staff benefit is deemed to be a 'trivial benefit' when:

• it costs £50 or less to provide
• it isn't cash or a cash voucher
• it isn't a reward for an employee's work or performance
• it isn't included in the terms of an employee's contract

You're not required to pay tax on, or notify HMRC about trivial benefits.

Your corporation tax bill is due nine months and one day after the end of your accounting period. Do note that in the first year of setting up your company, your annual accounts will typically cover more than 12 months-and as such, you'll have two payment deadlines for your corporation tax.

Different payment rules and deadlines will apply if your taxable profits amount to more than £1.5 million.

As a self-employed person, there are two ways to calculating the allowance you can claim for working from home. You can claim a fixed rate of £6 per week, or a proportion of household costs used by the business. Further information is available on our resource on the use of home allowance.

You can cancel your VAT registration online, or by sending form VAT7 via post.‍

How to Deregister for VAT in the UK:

VAT (Value Added Tax) is a tax that is applied to goods and services in the UK. It is a complex and often confusing system, so understanding how to deregister for VAT is essential for any business. This article will explain the process of deregistering for VAT in the UK, and the implications of doing so.

Why Would I Need to Deregister for VAT?

There are a few reasons why you may need to deregister for VAT. The most common is if your business is no longer trading, or if it is no longer making taxable supplies. You may also need to deregister if your business has become inactive, or if you have moved abroad.

What Are the Steps to Deregister for VAT?

The process of deregistering for VAT is relatively straightforward. The first step is to inform HM Revenue & Customs (HMRC) that you wish to deregister. You can do this by completing form VAT 7 and sending it to HMRC. You should also include any outstanding VAT returns and any other relevant documents.

Once HMRC has received your form, they will assess your application and decide whether or not to deregister you. If your application is successful, you will receive a letter from HMRC confirming your deregistration.

What Are the Implications of Deregistration?

When you deregister for VAT, you will no longer be able to charge VAT on goods or services that you sell. This could mean that you will lose out on some of your profits, as you will no longer be able to add the VAT to the prices of your goods or services.

You will also no longer be able to reclaim any VAT that you have paid on purchases. This could have a significant impact on your cash flow, as you will no longer be able to reclaim the VAT that you have paid on items such as stock or equipment.

It is important to note that you will still be liable for any VAT that you have charged on goods or services that you have sold before your deregistration. You will need to pay any outstanding VAT to HMRC before you can deregister.

Can I Re-register for VAT?

Yes, you can re-register for VAT if your circumstances change and you are once again liable to charge VAT. You can do this by completing form VAT 1 and sending it to HMRC.

Conclusion

Deregistering for VAT can be a complicated process, but understanding the implications and the steps involved is essential for any business. If you are considering deregistering for VAT, it is important to ensure that you have informed HMRC and paid any outstanding VAT before you do so. You should also consider the implications of deregistering, as this could affect your profits and cash flow. Finally, you should be aware that you can re-register for VAT if your circumstances change.

VAT registration is mandatory when you fulfill the conditions indicated below, and you're required to register within 30 days of fulfilling any of these conditions.

• Your VAT taxable turnover exceeds the current threshold of £85,000 (for a 12-month period ending in 2020/21). The VAT taxable turnover refers to the total value of everything that you sell that isn't exempt from VAT.
• You expect your VAT taxable turnover to exceed £85,000 in the next 30-day period
• Your business had a taxable turnover exceeding £85,000 over the last 12 months

What are the Dividend Tax Rates in the UK?

As a business owner in the UK, you may be wondering what the dividend tax rates are. This is an important question to ask, as the dividend tax rate you pay will have a direct impact on your business’s profitability. In this article, we will look at the different dividend tax rates in the UK and how they might affect your business.

In the UK, the dividend tax rate is determined by the amount of income you earn from dividends. If you are a basic rate taxpayer, then you will pay 7.5% on the first £2,000 of dividend income, 32.5% on the next £34,500 and 38.1% on any income above that. For higher rate taxpayers, the rates are 32.5% on the first £34,500 and 38.1% on any income above that.

The dividend tax rate also depends on the type of company you own. If you are a sole trader, then the dividend tax rate is the same as for an individual. However, if you own a limited company, then the dividend tax rate is different. The rate for limited companies is 19% on the first £2,000 of dividend income, 32.5% on the next £34,500 and 38.1% on any income above that.

It is also important to note that the dividend tax rate in the UK is different from the corporation tax rate. The corporation tax rate is the rate that a company pays on its profits. The rate for companies in the UK is currently 19%.

When it comes to setting up a business, it is important to consider the dividend tax rate, as it could have a significant impact on your business’s profitability. For example, if you are a higher rate taxpayer, then you could be paying a higher rate of tax on your dividends than on your other income. This could mean that your business is not as profitable as it could be.

It is also important to remember that the dividend tax rate is not the only factor that affects the profitability of your business. Other factors such as the amount of expenses you incur, the amount of capital you have available and the type of business you run will also have an impact on your business’s profitability.

It is also important to remember that the dividend tax rate in the UK is subject to change. The government can change the rate at any time, so it is important to keep up to date with any changes that may affect your business.

In conclusion, the dividend tax rate in the UK is an important factor to consider when setting up a business. The rate you pay will depend on the amount of income you earn from dividends and the type of company you own. It is also important to remember that the rate is subject to change, so it is important to keep up to date with any changes that may affect your business.

If you're paying salaries to employees or directors, you need to register for PAYE and pay your PAYE bill to HMRC.

• Monthly payments: Your PAYE bill is due on the 22nd of the next tax month.
• Quarterly payments: Your PAYE bill is due on the 22nd after the end of the quarter.

There are various ways to make your payment.

• Same or next day payments: online or telephone banking, CHAPS
• Payments processed in 3 working days: debit or corporate credit card payments (online), Bacs, cash or cheque payments at your bank or building society, Direct Debit, by cheque through the post
• Payments processed in 5 working days: Direct Debit (if it's the first time you're setting up a Direct Debit payment)

-

Your corporation tax bill is due nine months and one day after the end of your accounting period. For example, if the end of your accounting period falls on 31st March, your corporation tax payment will be due on 1st January.

There are various ways you can make your corporation tax payment:

• Same day or next day payments: CHAPS, online or telephone banking (Faster Payments)
• Three working days: BACS bank transfers, Direct Debit, debit or credit card payment online, payment at a bank or building society
• Five working days: Direct Debit (if you haven't set up a Direct Debit previously)

The corporation tax rate for company profits is 19%.

The income tax rates, along with the Class 2 and Class 4 National Insurance rates for 2020/21 are as follows:

The P11D is a tax form that records benefits in kind that employees and directors of a company have received across the year. The information provided enables HMRC to figure out if you're required to pay tax on these benefits.

Payments on account are advance payments for your tax bill that are spread out across the year. You'll need to make two payments each year, and these are due on 31st January and 31st July.

Capital gains tax (CGT) is a type of tax applied to profits made when you sell or dispose of an asset. As its name suggests, it's the gain you make that is taxed-and not the amount you receive for the asset.

You're required to pay CGT when you sell assets such as personal possessions worth £6,000 or more, property that isn't your main residence, your main residence if you've let it out, used it for business or it's very large, as well as business assets.

Corporation tax refers to tax you pay on the profits earned by your company. You'll need to register for corporation tax within three months of trading commencing.

Corporation tax is a tax imposed on the profits of companies and other legal entities in the United Kingdom. It is one of the main sources of revenue for the government, and it is important for businesses to understand the rules and regulations associated with it.

Corporation tax is a tax on the profits of companies and other legal entities in the UK. It is a tax on the profits of a company after all costs and expenses have been taken into account. It is charged at a flat rate of 19% on all profits over £300,000.

For businesses that have just started up or are in the early stages of growth, the rate of corporation tax is lower. This is known as the Small Profits Rate and is currently set at 20%. This rate applies to companies with profits of up to £300,000 in their first year of trading.

When a company is liable for corporation tax, it must file a corporation tax return. This return must be filed with HMRC by the company's accounting period end. The company must also pay any corporation tax due by the same date.

In addition to corporation tax, companies may also be liable for other taxes such as PAYE, National Insurance Contributions and Value Added Tax (VAT). It is important to note that these taxes are separate from corporation tax and must be paid separately.

When it comes to setting up a business, it is important to understand the rules and regulations associated with corporation tax. It is important to ensure that you are aware of the deadlines for filing corporation tax returns and paying any corporation tax due.

It is also important to understand the different rates of corporation tax that apply to different types of companies. For example, companies with profits of up to £300,000 in their first year of trading are subject to the Small Profits Rate of 20%.

Finally, it is important to remember that corporation tax is only one of the taxes that businesses may be liable for. It is important to ensure that you are aware of all the taxes that you may be liable for and to ensure that you are compliant with the relevant rules and regulations.

In conclusion, corporation tax is a tax imposed on the profits of companies and other legal entities in the UK. It is important for businesses to understand the rules and regulations associated with it and to ensure that they are compliant with the relevant rules and regulations. It is also important to ensure that you are aware of the different rates of corporation tax that apply to different types of companies and to ensure that you are aware of all the taxes that you may be liable for.

The deadline for filing your company tax return is 12 months after the end of the accounting period it covers.

If you are a business owner in the UK, it is important to know when your company tax return is due. The process of filing a company tax return can be complex and time consuming, so it is important to know when it must be submitted to HMRC.

The due date for a company tax return depends on the type of business you have and the size of your company. Generally, the tax return must be filed within 12 months of the end of your company’s accounting period. This is the period of time that your company uses to calculate its profits and losses.

For most businesses, the accounting period is the same as the tax year. The tax year runs from 6 April to 5 April the following year. Therefore, if your company’s accounting period runs from 6 April 2020 to 5 April 2021, your company tax return must be filed by 6 April 2022.

If your company’s accounting period is different from the tax year, then the due date for your company tax return will be 12 months after the end of your accounting period. For example, if your accounting period runs from 1 January 2021 to 31 December 2021, your company tax return must be filed by 31 December 2022.

It is important to note that the due date for filing your company tax return may be earlier than the due date for paying your company’s taxes. HMRC will usually give you a deadline for paying your taxes that is earlier than the due date for filing your company tax return.

If you are a new business, you must register with HMRC within three months of starting your business. Once you have registered, HMRC will send you a notice to file a company tax return. This notice will give you the due date for filing your company tax return.

If you are a small business, you may be eligible for HMRC’s Simplified Cash Basis for calculating your company’s profits and losses. This means that your company tax return will be due nine months after the end of your company’s accounting period.

If you are a large business, you must use the traditional accruals basis for calculating your company’s profits and losses. This means that your company tax return will be due 12 months after the end of your company’s accounting period.

It is important to note that you may be charged a penalty if you fail to file your company tax return on time. HMRC can charge a penalty of up to £1,600 for late filing of a company tax return.

If you are unsure when your company tax return is due, it is important to contact HMRC as soon as possible. HMRC will be able to provide you with the exact due date for filing your company tax return and advise you on any other requirements you need to meet.

In conclusion, it is important to know when your company tax return is due. The due date depends on the type of business you have and the size of your company. Generally, the tax return must be filed within 12 months of the end of your company’s accounting period. If you are unsure when your company tax return is due, it is important to contact HMRC as soon as possible.

Payments for your Self Assessment tax bill are due on:

• 31st January: You'll need to pay tax that you owe for the previous tax year, as well as your first payment on account. For the 2020/21 tax year, the first payment on account is due by 31 January 2021, while the balancing payment is due on 31 January 2022.
• 31st July (following the end of the tax year): You'll need to pay your second payment on account. For the 2020/21 tax year, the second payment on account will be due on 31 July 2021.

Your corporation tax bill is due nine months and one day after the end of your accounting period. Do note that in the first year of setting up your company, your annual accounts will typically cover more than 12 months-and as such, you'll have two payment deadlines for your corporation tax.

Different payment rules and deadlines will apply if your taxable profits amount to more than £1.5 million.

When it comes to setting aside money to pay your tax bill, the general rule of thumb percentage for self-employed individuals is 25% - 30%.

This figure will vary depending on the amount of profit you report. If your profit falls between £50,000 - £100,000, it is recommended that you set aside 40% for tax. And if your profit exceed £100,000, you should be setting aside 45% for tax.

Bear in mind that these are general recommendations, and may not be an accurate estimation depending on your circumstances. HMRC's ready reckoner tool can help you work out an approximate figure you need to set away each month. We recommend consulting our Forma accountants if you need further tax advice.

All active limited companies in the UK are required to file a company tax return, otherwise known as the CT600 form.

The CT600, along with supporting documents are submitted to HMRC annually to report a company's spending, profit and corporation tax to HMRC.

The SA100 is the main document you need to fill when completing your Self Assessment tax return. There are two ways to complete your Self Assessment tax return: you can make an online submission, or download the form SA100 and make a paper submission.

You can change your company's year-end-otherwise known as the accounting reference date (ARD). Changes can be made to your current financial year or the year before.

Your company's financial year can be shortened as many times as you want, with the minimum duration you can shorten it by being one day. You can lengthen your company's financial year by up to 18 months once every five years. If [other conditions apply](https://www.gov.uk/change-your-companys-year-end#:~:text=You can change your company's,the one immediately before it.), such as if your company is in administration, you'll be able to lengthen your financial year more often.

If your business can be classified under more than one sector because you provide different types of services or products, you'll then use the percentage that applies to the majority of your services or sales, and apply that to your total sales.

Let's say you're running a hair salon-cum-restaurant business. If 70% of your sales is derived from providing hair and beauty treatments, you'll then apply a VAT flat rate of 13% (for hairdressing and beauty treatment services) to your total turnover.

There are instances whereby VAT registration is mandatory, such as when your VAT taxable turnover exceeds the current threshold of £85,000. If you're not legally required to register for VAT, you'll then need to weigh out the benefits (enhances image, reclaim VAT) against the downsides (administrative burden, unexpected VAT bills).

The tax you pay is calculated by multiplying your VAT flat rate with your VAT-inclusive turnover. The flat rate you use will depend on the sector your business falls under.

Flat rate VAT is an important concept for UK businesses to understand, as it can help them save money and streamline their accounting processes. This article will explain what flat rate VAT is, how to calculate it, and the advantages and disadvantages of using it.

What is Flat Rate VAT?

Flat rate VAT is a simplified method of accounting for value added tax (VAT). It is designed to make it easier for small businesses to comply with their VAT obligations. Under the flat rate scheme, businesses pay a set percentage of their gross turnover to HM Revenue & Customs (HMRC) instead of calculating the VAT due on each individual sale.

The flat rate percentage varies depending on the type of business. For example, a business selling books or other printed materials would pay a flat rate of 12.5%, while a business selling services would pay 14.5%. The rate is set by HMRC and is reviewed periodically.

How to Calculate Flat Rate VAT

Calculating flat rate VAT is relatively simple. The first step is to determine the flat rate percentage applicable to your business. This can be done by checking the HMRC website or by speaking to an accountant.

Once you know the applicable rate, you can calculate the amount of VAT you need to pay. To do this, simply multiply your gross turnover by the flat rate percentage. For example, if your gross turnover is £10,000 and your flat rate percentage is 12.5%, then you would pay £1,250 in VAT.

Advantages of Flat Rate VAT

The main advantage of flat rate VAT is that it simplifies the accounting process for small businesses. Instead of calculating the VAT due on each sale, businesses only need to calculate the flat rate percentage once and apply it to their gross turnover. This can save time and money, as businesses no longer need to keep track of individual sales and the associated VAT.

Another advantage of flat rate VAT is that it can save businesses money. This is because the flat rate percentage is usually lower than the standard rate of VAT. For example, the standard rate of VAT is currently 20%, while the flat rate percentage for many businesses is 12.5%. This means that businesses can save 7.5% on their VAT bill.

Disadvantages of Flat Rate VAT

The main disadvantage of flat rate VAT is that it can be less beneficial for businesses with higher turnover. This is because the flat rate percentage is applied to the gross turnover, rather than the net profit. This means that businesses with higher turnover will pay more in VAT than they would under the standard rate.

Another disadvantage of flat rate VAT is that businesses cannot reclaim any VAT on purchases. This can be a problem for businesses that make a lot of purchases, as they will not be able to offset the cost of these purchases against their VAT bill.

Conclusion

Flat rate VAT is a simplified method of accounting for value added tax (VAT) that can be beneficial for small businesses. It is relatively easy to calculate and can save businesses money, as the flat rate percentage is usually lower than the standard rate of VAT. However, it can be less beneficial for businesses with higher turnover and businesses cannot reclaim any VAT on purchases.

There are three VAT rates: standard rate (20%), reduced rate (5%) and zero rate (0%). VAT is not charged for exempt or out of scope items, and the standard rate applies to most goods and services. Refer to HMRC's resource for further information on what VAT you should charge based on the type of goods or services you provide.

During the time between submitting your application and waiting for your VAT registration number, you won't be able to issue VAT invoices or to show VAT as a line item on your invoices.

To get around this issue, you can include VAT in the invoice total amount-without indicating VAT as a line item or showing it in your invoice. For instance, if you're charging a client £100 for a service rendered, you'll invoice the client for £120 to account for the standard rate VAT of 20%.

When you've received your VAT registration number, you can then reissue the invoice for £100 (and include £20 VAT as a line item).

The VAT flat rate scheme is one of the various VAT schemes business owners can register for, in which a fixed rate of VAT is paid to HMRC. The scheme simplifies the VAT return process for small businesses, saving them the hassle of tracking VAT on purchases.

You can reclaim VAT on the fuel portion of your mileage expenses if you don't pay a fixed rate under the Flat Rate Scheme.

You can reclaim all the VAT on fuel if you use your vehicle exclusively for business.

If your vehicle is driven for both business and personal use, you may handle VAT in the following ways:

• Reclaim all the VAT and pay the fuel scale charge for your vehicle
• Reclaim the VAT on fuel you use for business trips
• Don't reclaim any VAT. This may be the better option if you use your vehicle for business purposes on rare occasions, such that the fuel scale charge exceeds the VAT you can reclaim.

Every business owner, or any individual who sells a capital asset should be aware that a Capital Gains Tax (CGT) may apply. Therefore, it's important that you have a basic understanding of the rules surrounding CGT-and we'll explain more about the essentials in our article below.

Capital Gains Tax (CGT) is a tax paid on profits made when you sell or dispose of an asset. As its name suggests, it's the gain you make that is taxed-and not the amount you receive for the asset.

Curious about what a P60 form is and how to acquire one? Here, we'll deep dive into the importance and purpose of the P60 form. Whether you're an employee or an employer, understanding the P60 form is crucial for financial management and tax compliance.

You may already be familiar with the process of paying your Self Assessment tax bill.

Yet, it's always helpful to have a guide on hand-one that you can look over just before you make your payment, so you can be sure that you haven't missed out on important details that can put you at risk of incurring a penalty.

• Submission of Self Assessment tax return: You need to submit your online tax returns by 31st January. Paper returns are due earlier; these must be filed by 31st October.
• Payment: Any personal tax due for the previous tax year (6th April-5th April) must be paid up by 31st January. This means that your 2019/20 tax year must be paid up by 31st January 2021.
• Payments on Account: "Payments on account" are advance payments for your tax bill that are spread out across the year. You'll need to make two payments each year, and these are due on 31st July and 31st January.

Tip: If the payment deadline falls on a public holiday, make sure that your payment is submitted by the final working day.

If you're self-employed-either as a business owner or freelancer-you will need to complete a Self Assessment tax return.

It's one of the most important tax documents you will need to handle, and there are numerous details you'll have to keep in mind, including deadlines and late penalties.

Our guide offers a quick overview of the essentials-so it's just the article you need if you're getting started.

A Self Assessment (or Self Assessment tax return) is a form that business owners are required to submit to HMRC every year. It details how much you've earned and your sources of income, which enables HMRC to work out the Income Tax and National Insurance you need to pay.

This applies to self-employed workers, who-unlike employees-don't have their income tax automatically deducted from their salaries.

-

A dividend is money that's paid out by limited liability companies to investors, usually on a quarterly or annual basis. These payouts are based on the quarterly profits of your company as well as the amount of stock you own.

Dividends are calculated based on profits-what is left in your company after all expenses have been paid-not revenue.

Dividends can be either paid in cash or reinvested into your investment portfolio via dividend reinvestment, or via SCRIP dividends-which allow companies listed on the LSE to give investors additional shares instead of cash payouts.

Dividend tax refers to the rates by which those dividends are taxed according to HMRC. Each year, these tax rates may differ.

As a limited company director, you have greater flexibility to work around the tax system, and are able to implement tax optimisation strategies not available via other business structures.

One of these ways is to draw dividends from your company, as opposed to receiving a salary; doing so can help to reduce your tax bill.

If you're newly self-employed, this can be rather confusing.

You might be wondering: How can dividends help reduce my tax bill, and what taxes do I need to pay on them? Are there additional considerations I need to keep in mind?

These are the questions we'll be answering below:

The Unique Taxpayer Reference (UTR) number plays a crucial role in various aspects of taxation, including filing tax returns, registering for self-employment, claiming tax refunds, and corresponding with tax authorities. Understanding the purpose and significance of the UTR number is essential for individuals and businesses to fulfill their tax obligations effectively. In this guide, we will delve into the understanding of UTR numbers, their purpose, how to get unique taxpayer reference number, and their importance in managing your tax affairs.

What is Unique Taxpayer Reference Number?

A unique taxpayer reference (or UTR) number is a ten-digit code that's unique to you or your company.

Every individual and business entity in the UK that is required to file a tax return or has tax obligations is issued a UTR. This includes self-employed individuals, companies, partnerships, and other types of organizations. Your UTR number will remain the same throughout your entire life, just like your National Insurance Number.

The UTR is used to identify taxpayers and ensure accurate record-keeping for tax-related matters. It is typically provided on tax-related documents, such as self-assessment tax returns, correspondence with HMRC, and other tax-related forms.

It provides them with an easy way to match records to payments and monitor for suspicious activity. You'll need your UTR number to complete self-assessment tax returns, work with accountants, and pre-pay taxes in instalments.

Structure of a UTR Number

The structure of a Unique Taxpayer Reference (UTR) number consists of 10 digits. Here is a breakdown of the typical format:

1. First two digits: Tax office identifier - The first two digits of the UTR number represent the tax office that issued the number. This identifies the specific HM Revenue and Customs (HMRC) office responsible for your tax affairs.
2. Next six digits: Unique reference - The next six digits form a unique reference number. This number is specific to the individual or entity to whom the UTR is issued. It helps differentiate between different taxpayers within the same tax office.
3. Final two digits: Checksum - The last two digits of the UTR form a checksum. This is a validation mechanism used to ensure the accuracy of the UTR number. It helps detect any errors or discrepancies that may have occurred during the entry or processing of the UTR.

Overall, the UTR number is a 10-digit identifier that combines the tax office identifier, unique reference, and checksum to provide a unique and verifiable number for each taxpayer.

‍

Tax season can be stressful for small business owners.

You don't have the convenience of having an employer filing for you. While there are all kinds of tips and strategies for managing your taxes, the first order of business is to get key deadlines noted on your schedule, and determine how and when to make your payment.

Here's what you need to know:

At first glance, VAT can seem like one more aspect of your business that adds to your administrative tedium. Yet, as a small business owner, you want to run your business in the most tax efficient way possible-and VAT is a common area where business owners are losing out.

Even if you've hired an accountant, you need to have a good grasp of the essentials.

Below, we'll dive into an aspect of VAT that business owners often raise questions about the flat rate VAT scheme. We'll run through the basics, touch on recent regulatory changes and share our answers to frequently asked questions about the scheme.

VAT is simpler than it is usually made out to be, but you need to approach it step by step and crunch the numbers involved to find your best way to deal with it.

This is because, in addition to the normal way of paying VAT (known as the Standard Rate Scheme), HMRC also offers the Flat Rate Scheme, the Cash Accounting Scheme and the Annual Accounting Scheme for small businesses with turnover under a certain amount.

Each of these change your tax liability and how you pay in different ways. We shall deal with them at the end of the article.

The Standard Rate Scheme is the essence of VAT however, and it neither overly complex nor particularly difficult to get your head around.

"Can I claim my smartphone as an expense?" is a simple, but a common question for first-time contractors.

That's because HMRC's expenses rules can be confusing, and while you want to be sure that you're running your business as tax-efficiently as possible, it's just as important to be in the good books of HMRC.

We've put together a short guide so you can get a quick overview of the basics. If there are any areas you're unsure about, you may check in with our accountants at Forma so you can be sure that you're claiming your limited company expenses correctly.

Advisory fuel rates are recommended repayment amounts a company can use when reclaiming the fuel element on business mileage.

The rates are used to calculate:

• How much employers should reimburse employees for business travel using the company car
• How much employees need to repay employers for private travel using the company car
• The VAT you can claim back on business mileage using your personal vehicle

Being self-employed often means having to juggle multiple roles and tasks.

Amidst all your different responsibilities, keeping track of your business mileage can appear tedious-and it can easily become a task that you postpone time and time again. Yet, these little trips can add up, and as a small business owner, it's important that you make the most of what you can claim.

If you're newly self-employed, or just want to get a grasp on the basics of claiming your business mileage, this article is for you.

It explains the essentials, including how you can calculate your costs, the records you need to keep, and other important information that you need to be aware of.

Both business owners and employees can claim business mileage.

The tax implications of providing a company car can be complex-and made even more confusing by HMRC's tax changes.

To help you along, we've put together an article that will guide you through the essentials.

We'll start with the basics, explaining who pays for company car tax and how it is calculated, before we run you through a quick summary of tax rates changes that were announced in July 2019.

Our article will likely answer the key questions that you have surrounding company car tax, but bear in mind that it isn't a substitute for professional advice. If you have further questions about tax and how it affects your business, do reach out our accountants at Forma for personalised advice.

As a small business owner, staying on top of your finances can seem overwhelming, particularly when you're just starting out.

One of the key areas you need to keep an eye on is your taxes, and that's tricky subject to navigate. You want to reduce your tax bill wherever possible-and be in the good books of HMRC while doing so.

Below, we'll share a few simple tactics you can implement to reduce your Corporation Tax. Keep in mind that these are tactics that apply to businesses in general, and depending on your situation or industry, there could be other tax reliefs that may apply.

And as your business grows, there may be allowances or deductions that you now qualify for, but missed out on applying for previously. As such, we highly recommend checking in with our accountants at Forma to clarify any tax issues you're unsure about.

IR35 is a piece of legislation which allows HMRC to treat private contractors as if they were employees. In other words, IR35 (also known as "Off-Payroll Working Rules") aims to determine if someone working in the private sector should be classified as an employee - something that can impact tax liability and national insurance contributions.

IR35 was introduced to combat the problem of "disguised employment", where employees offer their services as limited company contractors to pay less income tax and National Insurance.

Prior to April 2017, individual contractors working in public sector businesses were responsible for determining their own IR35 status. They were also responsible for paying the appropriate taxes and National Insurance contributions. However, from April 2017, the responsibility for assessing and determining IR35 status shifted from the individual contractor to the public sector organization or agency that engages their services.

In the private sector, it was also the responsibility of contractors to determine their own IR35 status and comply with the tax regulations. From April 6, 2021, though, the responsibility has shifted to the private sector client.

Will it affect me?

This off-payroll legislation is usually a threat to your income only if you are self-employed, and provide your services via a limited company.

HMRC may decide that you should, in fact, deduct income tax and NI contributions as if you were an employee working in the private sector or public sector.

What would that mean?

If your contract is found to fall within IR35, then the difference in take-home pay usually amounts to around 20%.

But that's not all.

HMRC may choose to investigate previous contracts going back at least 6 years to see should also have come under the off payroll working rules of IR35. So this could mean a higher income tax bill and a bulk payment for previous unpaid income tax, plus penalties and interest.

What do I need to do?

You need to structure your private sector contracts and working arrangements in such a way that they fall outside off payroll working or IR35.

Your objective is to stop any enquiry by HMRC before it has a chance to get off the ground. This is usually not that difficult to do, but the process is technical and a bit complicated.

If you are a legitimate contractor trying to make your way through a busy year without falling foul of HMRC's complicated IR35 legislation and obscure assessment process there is a clear and straightforward action plan below.

As a limited company director, you want to run your business in the most tax-efficient way possible.

One way to achieve this is to correctly claim for allowable business expenses so that you don't have to pay more tax than you are legally obliged to.

It can be tricky figuring out what you can or cannot claim, and this is where our guide comes into play.

We'll run through the different expenses you can claim, but remember that this isn't a definitive guide. Check out our resource hub on limited company tax topics for more information, or consult our specialist accountants at GoForma if you need personalised advice.

When you're self-employed, you have unique financial obligations-especially when it comes to paying your taxes.

When you work for a larger corporation, or even a relatively small business, your company takes on a large percentage of handling your tax responsibilities for you.

As a freelancer or small business owner, you're on your own. You work as an independent contractor for each of the clients you work for-and they don't take taxes out of your check before they send it to you.

How then should you handle the responsibility of paying your taxes?

This guide will help you get started:

Allowable business expenses are costs that you can claim as a deduction against your revenue, which reduces the amount of tax you need to pay.

Here's an example: if your revenue is £35,000 and your allowable expenses total at £5,000, you'll just be taxed on £30,000.

The rules surrounding allowable business expenses aren't always straightforward, and this is where our guide comes into play.

In this article we will run through the most common expenses that sole trader businesses claim for, along with tips you can implement to ensure that you are keeping proper records.

Bear in mind that this isn't a definitive guide, so if you need personalised advice, it's best to consult our accountants atForma.