Value Added Tax(VAT)

You must register for VAT if your turnover in any 12 month period is over a specific limit (currently £85,000), or if you think it may go over the limit in the next 30 days– this limit is normally increased annually in the Chancellor’s Budget. You may also register voluntarily at any time, however note that VAT registration can affect competition. Why not call us for registration advice. 


 All VAT registered businesses must submit their returns online and pay electronically any VAT that is due. HMRC provide full details on how to do this in the VAT registration pack which is sent out to all newly registering VAT customers.

As with other tax collection schemes, registration for VAT comes with  the responsibility of onerous record keeping requirements. Therefore if the VAT recovery is relatively small, the responsibilities of registering might indeed outweigh the benefit. Remember to keep VAT invoices issued and received for a minimum period of 6 years.

Keeping Records

It’s vital to keep full and accurate records of your income and expenses from the start. Keeping records makes sound business sense and is a legal requirement. So it’s important to get a proper system in place from the outset, and update the information regularly. Also, keeping records is important as a penalty may be due for not taking reasonable care with records and tax returns.

You'll need to keep at least:
  • invoices for sales and purchases
  • receipts for business expenses
  • bank records
​Get organised keep everything in one folder throughout the year and then simply hand this to us when you need to prepare your self assessment return. Remember failure to keep accurate records my mean penalities.
For more information about taking reasonable care, you may find the following resources useful:
• www.gov.uk/self-employed-records

Whether trading as a sole trader or a limited company, it is important to keep proper and comprehensive business records so that any reliefs available can be claimed.


Call now for your free consultation:
 Tel: 07958347093

National Insurance Contributions

National Insurance contributions are paid by almost everyone who works for a living and go towards paying for pensions, benefits and healthcare.

If you are self employed there are two types of national insurance contributions you should know about.


Class 2 National Insurance contributions.
Most self-employed people have to pay Class 2 NIC but in certain circumstances you may be exempt from paying. Your Class 2 NIC payments will become due on
31 January and 31 July, the same as a Self Assessment tax bill.You pay Class 2 NIC at a fixed amount, either monthly or six monthly by Direct Debit.

Class 4 National Insurance contributions.
You pay Class 4 NIC if your annual taxable profits are over a certain amount. In certain circumstances you may be exempt from paying. You pay Class 4 NIC at the same time as your Income Tax if you’re self-employed or in a partnership. 
​Income Tax and Class 4 NIC are based on your profits from self-employment. You have to fill in a Self Assessment tax return each year so that HMRC can work out how much tax and Class 4 National Insurance is due.

It's possible to be both employed and self-employed at the same time. Many people work for an employer and also run their own business. Providing all the relevant information to HMRC will ensure that you don't overpay your NICs. ​If you are not sure if you are paying the right amount call us.



Limited Company

Managing tax and accounts for limited companies can be complicated. We are here to offer you these services.

If you are running a limited company then you may need to pay Corporation Tax. Corporation Tax is a tax on your company’s overall taxable profits.There is a lot to know about Corporation Tax and many people choose to use an accountant to help them manage this. We are here to help you.

​All Company Tax Returns must be filed online and you must pay your Corporation Tax and related payments such as interest or penalties electronically. If you file your return late, you may have to pay a penalty. If you pay your Corporation Tax late or don’t pay enough, you’ll be charged interest.

At the end of your company's financial year, you must prepare full (‘statutory’) annual accounts. You then use this information to:​
  • send accounts to Companies House; Deadline-9 months after your company’s financial year ends.
  • send a Company Tax Return to HMRC and pay Corporation Tax - or tell HMRC that your limited company doesn’t owe any tax. Deadlines- file a Company Tax Return 12 months after your company’s financial year ends. And pay Corporation Tax 9 months and 1 day after your company’s financial year ends.

These deadlines are for private limited companies.


Self Employed-Individual

If you are self employed you’ll pay Income Tax on your taxable profits, through Self Assessment. You may also need to pay National Insurance and capital gains tax.
If you employ someone – even if it’s only yourself, as a director – you’ll have to operate PAYE (Pay As You earn) on their earnings. You’ll need to register as an employer with HMRC

​A tax year runs from
6th April to the following 5th April. After the tax year ends on the 5th April, you will need to complete a Self Assessment tax return, which you can either do online or by filling in a paper form.
If you complete a paper tax return you need to make sure HMRC have received it by
31 October. You may be charged a penalty if your paper return is received after this date.
If you choose to do your tax return online, you need to make sure HMRC have received it by
31 January the following year, giving you an extra three months. There is an automatic penalty for filling your return late of £100.

​Whether you complete a paper tax return or choose to do it online, you also need to
pay any tax you owe by 31 January. If you pay your tax late, you will be charged interest from the date your tax was due and may be charged penalties.

Income tax and capital gains tax are both assessed for a tax year.


Key Tax Rates

Corporation Tax : Year ending 31st March 2019

19% on all profits below £300,000

19% on all profits above £300,000

The company tax year starts on 1 April.


Capital Gains tax rates 2018-19:
CGT allowance  is £11,700for individuals and £5,850 for Trusts. Gains above the allowance are taxed at:
10% and 20% tax rates for individuals (not including residential property and carried interest)
18% and 28% tax rates for individuals for residential property and carried interest
20% for companies
10% for gains qualifying for Entrepreneurs’ Relief
20%- 28% for trustees
10% for gains qualifying for Entrepreneurs’ Relief

VAT rates (2018-19):
20% standard rate
5% reduced rate
0% zero rate

Income Tax rates 2018-19 by tax band and type of income
Income Tax Band

Non-Savings

Income

Savings

Income

Dividend

Income

£0-£34,50020%20%7.5%
£34,501-£150,00040%40%32.5%
Over £150,00045%45%38.1%




Dividend Allowance£2,000

Personal Allowance£11,850