Tax Guides

If you are a limited company shareholder, you may have to pay tax on any dividend income you receive. Here we explain how company dividends are taxed and how to calculate the amount of tax due on dividend income.

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In this guide, we look at the taxes you will encounter if you start your own business as a sole trader and other things you should bear in mind before taking the plunge and becoming self employed. (more…)

Bonus payments may have been a bit thin on the ground since the COVID-19 pandemic hit. Hard-pressed businesses, struggling to meet existing commitments, may balk at the prospect of parting with cash. However, the benefits of having a loyal and satisfied staff may prompt them to consider alternatives to the cash bonus.
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VAT is something that many new business owners overlook. Many assume that it doesn’t apply to them – surely it’s just for the bigger businesses out there? That may be true most of the time, but VAT could still apply to your business so it’s important to know about it.

If you’re either a sole trader, or limited company owner looking to get clued-in about all things VAT, keep reading. We’ll take you through whether you need to register, how to register and what you need to do next. (more…)

In this concise guide, we explain which tax records small businesses (including the self employed and limited companies) should keep, and for how long – according to the prevailing HMRC rules.
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Small businesses, and the individuals who run them, are subject to a wide array of taxes – from Corporation Tax to National Insurance.

Here is an overview of the main UK business taxes you will encounter as a business owner, together with links to our more in-depth guides.
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National Insurance is a deduction from earnings, set up originally to fund various State benefits such as the NHS, the State pension and other welfare-related schemes.
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Becoming self employed is a new and exciting chapter of life, but it does come with extra responsibilities. With so much to think about, we asked David Genders, author of The Daily Telegraph Tax Guide to explain the key financial and tax points you need to consider when going self-employed. (more…)

If you run a limited company, you can distribute any profits you make via dividends to your shareholders. But how do you keep a record of your dividend distributions?
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If you are dealing with a new customer or supplier and want to check whether the VAT registration number (VRN) they have supplied is valid, there are two ways you can do so.
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Making Tax Digital (MTD) is arguably the biggest change to the UK’s tax system for a generation, so here’s a quick walkthrough of what MTD means for small businesses, together with five practical steps to help you tackle the changes. (more…)

If you set up a business via a limited company, your annual profits will be subject to Corporation Tax.

Dealing with your corporation tax issues is one of your accountant’s key tasks. However, it is ultimately the directors of a limited who are responsible for ensuring that a company’s tax affairs are in order. (more…)

Most normal ’employees’ have tax deducted at source via the PAYE system and are unlikely to have to fill in a tax return unless they receive other income.
When you start a business, you will join the ranks of those that fall under the self assessment tax regime.
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In light of the launch of the Certificates of Tax Position tool, there has never been a more important time for entrepreneurs to be aware of the risk on any undeclared offshore income or gains.
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Savvy entrepreneurs seem to make more money, yet find perfectly legal ways to optimise their taxes. So what do they know, and do differently to cut their tax bills?
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If you need to submit a Self-Assessment Tax Return (SATR) it’s imperative you get it in on time and free of any mistakes. There are penalties for not submitting your tax return on time and you may have to pay a fine if HMRC decide that you haven’t taken sufficient care in preparing it.

This article explains how to get started with your tax return, and how to avoid common mistakes that people make on their self assessment tax return. (more…)

Small business tax is not straightforward. In fact, it can be a real minefield for the unwary. However, if you take a little time, and work with your accountant, it’s usually possible to find ways to save some tax.
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Here are some tips to help small businesses keep on top of their VAT responsibilities – from choosing the right VAT scheme in the first place, to avoiding getting on the wrong side of HMRC.
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In this article, we look at what the PAYE scheme is, and how it applies to the self employed, including limited company directors.
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Increasing cash flow and being tax-efficient are usually near the top of every small business owner’s agenda. One way to achieve both these aims is to take advantage of the various tax incentives available to businesses.
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VAT is one of the more complex accounting practices you’ll have to undertake as a business, which is why it can help to make it as simple as possible.

The Flat Rate VAT scheme does exactly this and, if you’re eligible, could save you the headache of unnecessary work. (more…)

This guide looks at the types of Stamp Duty your business may be liable for; Stamp Duty Land Tax on property transactions, Stamp Duty Reserve Tax and Stamp Duty on share transactions.
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Running your own business sometimes seems to be a series of successes followed by setbacks.

You win a big client, then lose an existing client. You hire the perfect employee and their current employer offers them more money to stay. You make a nice profit, and the taxman comes along and takes almost 20 per cent of it! Talk about three steps forward, two steps back.
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Many business owners don‘t realise that the expenses they can claim against income go beyond rent, rates, equipment, marketing, insurance and salaries. How about food, holidays and school fees?

To help find out if you could cut your tax bill, we asked a tax expert to explain more about some of the less well-known business expenses you can claim. (more…)

In a way, HMRC expects very little of limited companies regarding Corporation Tax. All it asks is that as a director of the company, you comply with all tax laws, fill out your company tax return correctly, file it on time and pay up on time.

Sounds simple. But of course there are lots of different laws and conditions to comply with, and plenty of mistakes to be made.
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Cash flow is arguably one of the most important parts of managing your small business. So any tax incentives or potential tax relief opportunities that are available should always be grabbed with both hands.
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Originally, PLNs were predominantly used by HMRC to tackle “phoenixism”, where the assets and the operations of an insolvent business that has run up significant tax debts are transferred to a new company operated by the same management team that has a history of non-payment of tax liabilities. However, HMRC’s use of PLNs is now increasing. (more…)

If you, or your business, have used tax avoidance schemes in the past, you could soon be receiving an Accelerated Payment Notice (APN) from HMRC. So what should you do if you receive an APN? (more…)

Significant changes to UK salary sacrifice schemes have now been implemented. Affecting both employers and employees, these changes essentially remove the tax incentives of many of the benefits in kind (BiK) offered under salary sacrifice arrangements.

With, the new salary sacrifice rules reducing the tax benefits of salary sacrifice schemes, here’s what small businesses need to know about the changes and how they affect employers and employees. (more…)

Your business should register for VAT if your “taxable supplies” over the past 12 months has exceeded the VAT registration threshold.
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If you are registered for VAT, have to file a VAT return in the near future, or are concerned about putting the wrong amounts on your VAT return, here are 5 VAT traps to watch out for.
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When you buy certain new equipment, invest in buildings or research and development, you can deduct a proportion of the cost from your taxable profits and reduce your business tax bill, through Capital Allowances.
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Is a Jaffa Cake a biscuit or a cake?

Now if you think this is some playground joke, think again. This is a real question that judges were asked to consider in a landmark VAT case.

The fact it took a court case to work out the answer to this question gives you an insight into just how complicated the UK’s VAT system has become. If HMRC, can’t answer such a simple question, what hope is there for busy small business owners?

With the complexity of the VAT laws it’s understandable that businesses make mistakes on their VAT returns. However, these mistakes can be very costly both in terms of paying the wrong amount of VAT and also triggering a VAT investigation.

To help you avoid making these expensive mistakes, we asked Jonathan Amponsah, founder of The Tax Guys, to reveal the 21 common mistakes small businesses make on VAT Returns. (more…)

Millions of small business owners will see the amount of tax they pay go up following the Spring 2017 Budget.

Chancellor Philip Hammond announced in his Budget speech, plans to increase the taxes paid by the self-employed and limited company directors.

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Tax isn’t the most exciting part of running your own business, but it is an issue that you will have to tackle at some point.

To help you to quickly get to grips with the subject, here are some handy tax tips based on our findings of working with small businesses over the past 15 years, and from our own personal experiences of running our own business at ByteStart.
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The government’s new digital tax accounts system introduces a fundamental shift in the way small business owners – both those working as self employed and those operating as limited companies – report and pay their tax liabilities.
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