Corporation and Self Assessment Tax

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Self Employed Tax Guidance

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Self Assessment Tax

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Corporation Tax Guides

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Director + Limited Company Expenses

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P60 & more explained

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Explore our tax guides on VAT, expenses, self assessment and more.

Our business and personal tax guides were created for sole trader/ self employed individuals, contractors and limited companies. From making sure you're claiming the right expenses to how to register for VAT or Self Employed, we'll walk through all your business tax requirements.

Contractors in UK

General Tax: UTR Numbers, P60 & Capital Gains

UTR Numbers are the key thing you'll need for all your personal and company tax requirements.

FAQs & Guides

What are UTR numbers?

Unique Taxpayer Reference (UTR) numbers are use to identify both personally and your Limited Company to HMRC.

Accountant explaining to a client about how to get a UTR number

UTR numbers: what is it and how to get it

Your UTR number is essential for filing tax returns and other business functions

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What is a P60?

A P60 is an official form you obtain at the end of the tax year. It indicates how much you've earned over the tax year (this starts on 6th April, and ends on 5th April of the following year), as well as the amount you've paid in PAYE income tax and National Insurance contributions.

You may need a P60 for things like:

  • Applying for a mortgage
  • Claiming a Tax Refund
  • Applying for Tax Credits

To find out more about P60's check out our guide below:

Image of a P60 form from HMRC

What is a P60 Form: When You Need It & Why You Might Not Have One

A P60 is an important tax document which you'll need for several reasons. We'll dive into what a P60 form is, why you need it and how to get one.

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What is capital gains tax?

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. 

To find out what assets or values capital gains tax is applied on then check out our guide below:

Property asset where capital gains tax can be applied

What Is Capital Gains Tax in the UK & What Are the Rates?

We explain the essentials related to Capital Gains Tax (CGT) - what it is, when it is applicable, current rates, paying it and record keeping.

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Contractors in UK

Claiming Expenses: Limited Company & Self Employed

Whether you're self employed or you have a Limited Company, there are a range of tax deductable expenses you should ensure you're aware of and that you're claiming through your business - it could save you thousands in tax!

FAQs

What expenses can I claim when Self Employed?

You can claim a range of expenses when Self Employed and you'll need to report this in your annual Self Assessment Tax Return.

Examples expenses you can claim include:

  • Office rental or coworking costs
  • Business and water rates
  • Utility bills
  • Property insurance
  • Use of home office
  • Claim a portion of your bills if you've set up a home office
  • Office equipment
  • Marketing costs
  • Professional subscriptions
  • Business travel
  • Business mileage
  • Professional fees
  • + loads more

Check out our complete guide below which will walk you through all the expenses you should be claiming!

Electronic items that can be claimed as part of business expenses by a sole trader or self employed

Self employed expenses & tax allowances guide

We run through the expenses you can claim as a self-employed person or sole trader, plus tips you can implement for keeping good records.

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What expenses can I claim through a Limited Company?

You should definitely check out all the allowable expenses for your Limited Company as this not only reduces your corporation tax but also reduces your personal tax if you are purchasing any of these items personally.

The key categories include:

  • Employee expenses
  • Business travel
  • Office + office equipment
  • Professional service fees
  • General expenses (donations, eye tests)

To learn more about these expenses, read our guide below:

Wallet highlighting how much a Limited Company Director has to spend on business expenses

Limited company expenses & tax allowances guide

Understanding what you can or can't claim as limited company expenses is tricky-and here's where our article comes in to guide you along.

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What Director expenses can I claim?

As a Limited Company director you should make sure that you know what directors expenses you can claim.

The key categories include:

  • Business travel
  • Office + office equipment
  • Professional service fees + training

To learn more about these expenses, read our guide below:

Wallet highlighting how much a Limited Company Director has to spend on business expenses

Limited company expenses & tax allowances guide

Understanding what you can or can't claim as limited company expenses is tricky-and here's where our article comes in to guide you along.

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How do I claim business mileage?

Self employed taxi driver on a long mileage journey

How to claim for business mileage

We run through the basics of claiming your business mileage if you're self-employed.

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How do I claim mobile phone expenses?

self-employed person looking at mobile phone expenses

Claiming mobile phone expenses when self employed

A guide to claiming mobile phone expenses as a contractor.

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Contractors in UK

Self Assessment Tax Returns

You'll need to ensure that you've filed and paid your Self Assessment tax return before January 31st 2021.

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We'll help you complete your tax return before the deadline.

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FAQs & Guides

What is a self assessment tax return?

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.

Calculations used to complete a self assessment tax return

Self Assessment tax returns for the self employed

Our guide covers the basics about Self Assessment tax returns, including the registration process, deadlines and late penalties.

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Who needs to file a Self Assessment Tax Return?

Most people do not need to file a Self Assessment because they are taxed at source. But there are a few reasons you may need to complete a tax return:

  • You’re self-employed and earned more than £1,000
  • You are a landlord with rental income over £2,500
  • You made over £12,000 in profit from investments
  • You received more than £10,000 from savings interest or dividends
  • You have foreign income
  • You want to claim a tax refund (CIS, EIS, SEIS, donations)
  • HMRC tells you to submit one
  • Your income is over £100,000
  • You live abroad and had income from the UK
  • You’re in a partnership
  • You are a minister of any religion
Calculations used to complete a self assessment tax return

Self Assessment tax returns for the self employed

Our guide covers the basics about Self Assessment tax returns, including the registration process, deadlines and late penalties.

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What is the deadline to file?

You need to file and pay your self assessment by 31st January 2021. This is for income you received from April 6th 2019 until April 5th 2020.

To learn more about tax return payments, deadlines and penalties - check out our guide below:

Two accountants explaining to a prospective customer about tax returns and payment deadlines

Tax return and payment deadlines you need to know

Here's a summary of key dates you need to know in order to stay on top of your taxes

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How do I pay my self assessment tax return?

The easiest way to pay for your self assessment tax return is via bank transfer - check out our guide below for all the ways you can pay.

Man highlighting key data entries for a self assessment tax bill submission

How to pay your Self Assessment Tax

Making your Self Assessment tax payment? Use our guide as a checklist, so you don't miss out on the details.

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Contractors in UK

Self Employed Taxes

Considering going Self Employed? We can advise on any taxes and expense you could incur and how to avoid any last minute taxes.

FAQs

What taxes do I need to pay when Self Employed?

small business owner calculating her self-employed tax obligations

Self employed tax obligations guide

Here's what you need to know about paying taxes as a freelancer

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Contractors in UK

UK Corporation Tax

Every Limited Company in the UK will have to pay Corporation Tax on their profits.

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FAQs & Guides

What is a corporation tax?

Corporation tax is a tax paid by all UK limited companies. This is a tax based on your company profits, so if you don't turnover a profit then you have no tax to pay.

How much is Corporation Tax?

Corporation Tax in the UK is currently set at 20% of your company profits.

When do I pay corporation tax?

Your company tax is due 9 months and 1 day after your Company Year End.

Two accountants explaining to a prospective customer about tax returns and payment deadlines

Tax return and payment deadlines you need to know

Here's a summary of key dates you need to know in order to stay on top of your taxes

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How do I reduce my Corporation Tax?

The key way to reduce your corporation tax is by ensuring you're claiming for all the key company expenses you could be.

Our guide below details more about how to reduce your corporation tax:

City of London where most of corporation tax is paid

How to reduce your Corporation Tax bill

We run through a number of options you can take to lower your corporation tax bill.

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Contractors in UK

VAT

Value Added Tax (VAT) can be seen as an indicator of your current business turnover (i.e. you make more than £85k a year) but it's also a way to claim back VAT on other services that you acquire.

Registration means more monthly admin but it's worth exploring the advantages and disadvantages to registering in our VAT guide.

VAT Guide

FAQs

What is VAT?

Most of us are familiar with, or have a basic understanding of VAT (Value Added Tax). It is a type of consumption tax added to the cost of most goods and services for both B2C and B2B markets.

VAT is charged on:

  • items sold to staff (i.e. staff canteen meals)
  • commissions
  • sale of business assets
  • business sales (ie goods or services you offer as a business)
Accountant laughing at how simple it is to deal with VAT as a small business

What is VAT: registration, thresholds and schemes

Your comprehensive guide to understanding VAT as a small business owner

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What is the VAT threshold?

The current VAT threshold is £85,000 annual turnover.

Accountant laughing at how simple it is to deal with VAT as a small business

What is VAT: registration, thresholds and schemes

Your comprehensive guide to understanding VAT as a small business owner

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What is the Flat Rate VAT scheme?

Under the standard rate VAT scheme, you need to sum up the VAT you've charged to your clients, and deduct the VAT you've paid on goods and services purchased.

You'll pay the difference between the VAT you charge to your clients, and the VAT you pay on your purchases. This calls for rigorous record keeping, as you need to keep track of all transactions and the rate of VAT charged. With the flat rate VAT scheme, the process is simplified.

Rather than pay out the difference between the VAT you've charged to your clients and the VAT on your purchases, you'll pay HMRC a fixed rate of VAT.

The scheme is rolled out for small businesses that don't have a large turnover, thereby saving them from the hassle of tracking VAT on purchases.

To be eligible for the scheme, businesses need to have an annual turnover of £150,000 or less (excluding VAT). The amount of VAT payable under the flat rate VAT scheme depends on the industry you operate in.

To keep reading, check out our guide below:

A male small business owner considering a flat rate VAT scheme

The Flat Rate VAT scheme explained

As a small business owner, you want to run your business in the most tax-efficient way possible Our guide explains all about the Flat Rate VAT Scheme and how it works.

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Contractors in UK

Dividend Taxes

Whether you're a contractor or a Limited Company director, dividends will be a key way that pay yourself.

Dividends are often the preffered mechanism from which directors of micro limited companies will pay themselves but understanding the tax implications and tax rates will ensure you don't run into a surprise tax bill for your self assessment.

FAQs

What are dividends?

A dividend is a payment of profit that a limited company distributes to its shareholders. This is the money remaining after all business expenses and liabilities, as well as outstanding taxes (including VAT and Corporation Tax) have been paid off. 

Dividends must be distributed according to the percentage of ownership of each shareholder. Here's an example: if you own 50% of your company's shares, you will receive dividends amounting to 50% of the retained profit.

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What are the dividend tax rates?

The current dividend tax rate is calculated via a combination of your income tax band and a dividend allowance. 

The dividend allowance is a tax break that individuals receive on the first £2,000 in dividends i.e. the first £2,000 in dividends is tax free.

To calculate how much to pay in dividends, you have to understand income tax bands.You will have to include dividends into your income to determine your tax band.

Let's take a quick look at how £175 000 in dividend payments would be taxed in 2020.

This example assumes that your dividends are your only source of income.

  • You will pay nothing for the first £2,000 due to the tax allowance.
  • You will pay 7.5% (basic rate) for £2,000 - £37,500.
  • You will pay 32.5% (high rate) for £37,500 - £150,000.
  • You will pay 38.1% (additional rate) for +£150,000.

To read more about dividend tax rates and allowances, check out our guide below:

Two accountants calculating tax on dividends

What are the taxes, rates and allowances on dividends?

A beginner's guide to everything you need to know about dividends, dividend tax, your allowances and how to calculate your UK dividend tax rates.

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