New Business Company Tax Guide

7 minutes
Capital-Gains-Tax-Advice

Contents

Your business may be liable for a range of taxes to fulfil obligations to HMRC, including corporation tax, VAT, and national insurance. Our guide explores UK business tax and the importance of keeping accurate records.

As discussed at the beginning of this guide, as a limited company owner, you must fulfil your legal obligation of timely payment and submission of all relevant tax returns to HMRC. Adhering to the required due dates for tax returns is crucial to ensure compliance with tax regulations and avoid potential penalties.

By staying informed about your tax obligations and meeting the deadlines for tax returns, you demonstrate responsible financial management and ensure compliance with HMRC regulations. This section outlines some of the most common types of tax you may be liable to pay, providing you with the necessary information to fulfil your tax obligations accurately and promptly.  

Our handy business tax dates calendar contains all of the dates that you need to be aware of for your business tax filings, ensuring you never miss a deadline.

Corporation Tax

As a limited company owner, you must complete a Company Tax Return, also known as a “Corporation Tax Return”, for all your taxable profits. Company profits that are subject to corporation tax include:

  • Trading profits.
  • Income from investments.
  • Chargeable gains (selling assets for more than they cost).

Once you have submitted your company tax return (due 12 months after the end of your ‘accounting period’), paying your corporation tax by a secondary deadline (typically 9 months and one day after the end of your accounting period discussed above) is essential to avoid any potential financial penalties.

Completing and filing your corporation tax return can be complex and time-consuming, requiring careful attention to detail and adherence to specific deadlines.

Our corporation tax return service is designed to support you throughout this process, ensuring your tax returns are filed accurately and on time. With our expert assistance, you can be confident that you are fulfilling your obligations and paying the correct amount of tax. We will work closely with you to understand your company’s financial situation, calculate your tax liability, and guide you through the requirements and deadlines associated with corporation tax returns.

VAT

If your business is registered for VAT, submitting a quarterly VAT return to HMRC is legally required. The VAT return involves calculating the VAT charged on your invoices to customers and deducting the VAT you can reclaim for eligible business expenses. This calculation determines the amount of VAT you are either required to pay or are eligible to be reimbursed by HMRC.

Registering for VAT can be done for two reasons:

Our VAT returns service is designed to support you in registering your business for VAT and efficiently submitting your VAT returns to HMRC. We understand the complexities involved in VAT compliance. We can provide expert advice and guidance to ensure your VAT returns are accurately prepared and submitted on time, allowing you to focus on managing your business.

R&D

The R&D tax credit program aims to provide additional incentives for companies that engage in research activities that contribute to the advancement of their industry. By taking advantage of R&D tax credits, you can obtain funds that can be reinvested into your company, enabling you to hire additional staff and acquire the resources needed to scale your operations and meet the demands of your innovative projects.

Our R&D Tax Credits service is designed to review your business activities thoroughly, identifying projects that meet the specific criteria for R&D tax credits. We will assess your research and development initiatives, ensuring that all eligible activities are recognised and included in your claim.

With our assistance, you can unlock the potential of R&D tax credits, allowing you to access additional funds to fuel your company’s growth and innovation.

PAYE

PAYE (Pay As You Earn) is a mandatory system that applies to limited companies with employees and governs the collection of income tax and National Insurance contributions from employees’ salaries. Employers are responsible for managing tax deductions and National Insurance contributions at source, ensuring compliance with HMRC regulations.

Our comprehensive PAYE and payroll services are designed to assist you in effectively managing your payroll processes. We understand the importance of accurately and promptly paying your employees. Our services are tailored to ensure your employees receive their wages accurately and on time, helping you maintain a positive employer-employee relationship and compliance with PAYE requirements.

CIS (Construction Industry Scheme)

The Construction Industry Scheme (CIS) is a taxation scheme specifically designed for contractors and subcontractors operating within the construction industry in the UK. It governs the payment of taxes and outlines the procedures for tax collection and payment by contractors and subcontractors involved in construction projects.

Navigating the requirements of CIS can be complex and time-consuming. Our dedicated Construction Industry Scheme service supports you in ensuring compliance with the scheme’s regulations. Our service will give you peace of mind knowing that your contractors and subcontractors comply with CIS requirements. Our team of experts will review your operations, provide guidance on CIS compliance, and assist you in implementing the necessary procedures to meet the scheme’s obligations.

ATED

The Annual Tax on Enveloped Dwellings (ATED) is a tax imposed by the government on residential properties in the UK that exceed a certain value,  that are owned by Non-Natural Persons (NNPs).

An NNP can either be:

  • A company.
  • A partnership with at least one corporate partner/member.
  • A collective investment scheme.

If your limited company owns properties valued that exceed the ATED threshold, you may be subject to payments.

Our dedicated ATED guide offers valuable insights and guidance to help you navigate the value of the thresholds, meet the filing deadlines, and complete your ATED returns accurately and efficiently.

Self-Assessment

While not directly related to the limited company, business owners receiving income from the company are usually required by HMRC to complete a self-assessment tax return. This is different to employees paid through the PAYE system.

Self-assessment tax returns are necessary for several reasons, including:

  • Being a company director.
  • Having income from self-employment.
  • Having untaxed income (for example dividends).
  • Earning income exceeding £100,000.
  • Owning capital gains subject to tax.
  • Receiving a tax return notice from HMRC.
  • Savings and investments exceeding HMRC’s threshold.

The self-assessment tax return requires individuals to provide details of all their income sources and the corresponding tax payments made.

Navigating the complex and time-consuming landscape of personal income tax and HMRC regulations can be challenging. Our Self-Assessment Tax Returns service is designed to assist you in this process. We understand the intricacies of self-assessment and can provide guidance to help you accurately complete your tax return while ensuring compliance with HMRC requirements.

Company Cars

A company car is a vehicle provided by an employer for an employee’s private and business use, including commuting. HMRC categorises company cars as a Benefit-in-Kind (BIK), which means both the employer and the employee are required to pay tax and National Insurance Contributions based on values set by the government. Additionally, any fuel benefit provided by the employer is likely to be subject to tax if any portion is used for personal journeys.

The amount of tax due on a company car is determined by various factors, including the vehicle’s list price, CO2 emissions, and type of fuel used. It is crucial to accurately calculate the tax payable to explore all available options and select a vehicle that benefits your staff and business.

Our comprehensive Company Car Tax Guide provides information on the tax implications related to company cars. It covers topics such as the amount of tax you may be liable to pay, eligibility for claiming business mileage, and strategies to reduce your company car tax liability, enabling you to make informed decisions surrounding company cars that benefit your employees and your business.

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