As the founder of a company, there’s a long list of compliance tasks to get your head around – and one of the key tasks will be registering your company for business taxes.
Once you’ve registered as a limited company, you become liable for paying taxes on the profits you make. These taxes are collected by HM Revenue & Customs (HMRC) and provide the funds used by HM Treasury to pay for the running of the country. Paying your taxes isn’t just a compliance task – it’s part of your social and community responsibility as a business.
But what business taxes are there? And how do you know which of these taxes to pay?
Despite HMRC’s motto of ‘tax doesn’t have to be taxing’, the UK tax code can be a complex thing.
If you’re not a trained accountant and have limited experience in financial management, understanding the rules around business taxes can be confusing. So, to start with, let’s look at the main business taxes you’re likely to register for.
Key business taxes include:
When to register for VAT You must register if: your total VAT taxable turnover for the last 12 months was over £85,000 (the VAT threshold) you expect your turnover to go over £85,000 in the next 30 days You must also register (regardless of VAT taxable turnover) if all of the following are true: you’re based outside the UK your business
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Under the Construction Industry Scheme (CIS), contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC). The deductions count as advance payments towards the subcontractor’s tax and National Insurance. Contractors must register for the scheme. Subcontractors do not have to register, but deductions are taken from their payments at a higher rate
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