How are small businesses taxed in the UK? We explore the various taxes you will encounter as a business owner – either as a sole trader or a limited company.
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.
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.
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.
