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Registered Auditors & Chartered Accountants
If you’re new to running an SME in the Windsor or Maidenhead area, you should take some time to consider the various aspects of taxation that apply to you. While it’s not always a pleasant or exciting subject, often calculating and paying tax is seen as being far more complicated than it actually is. In this blog post, our chartered accountants have looked to dispel some myths surrounding small business taxation by detailing/explaining the key levies you should be aware of.
Keep in mind that while many Windsor and Maidenhead businesses choose to handle matters of taxation in-house, often by employing a full time staff member to head up a finance department, many outsource these duties to chartered accountants like our own. This might be because hiring a full-timer is too expensive, they value the expertise and accuracy that chartered accountants provide, they wish to minimise their bill and free up valuable time spent on calculating and filing tax returns, or any number of other reasons.
To discuss your own business’s financial requirements and figure out if we can help you with taxation, bookkeeping, payroll management or business plan preparation, don’t hesitate to give our friendly and highly experienced team of chartered accountants a call on 01628 778 733.
Income Tax – Sole traders around Windsor and Maidenhead will need to pay income tax on any profit generated via business activities that exceeds the personal allowance of £10,600. Limited company owners deal with income taxation slightly differently, paying a portion of any salary/dividends they award themselves.
National Insurance (NI) – Technically NI isn’t a tax (but it’s still cash you have to pay to the government). Sole traders have to pay a weekly NI fee of £2.80, unless annual profits fall under the £5,965 mark. Once profits exceed £8,060, an additional payment will be made which is determined by how much you’re earning each year. Owners of Windsor and Maidenhead limited companies paying themselves a salary of over £8,060 are also subject to NI payments, which under the PAYE system will be deducted automatically.
Corporation Tax – The most talked about taxation amongst limited companies is corporation tax. This is a flat tax of 20% made on any profits a business generates, unless it has previously made a loss. The deadline to pay by is nine months and one day after a company’s annual accounting period ends. Sole traders around Windsor and Maidenhead will be glad to hear they don’t need to pay corporation tax.
VAT – Sole traders, partnerships, limited companies and LLPs all need to pay VAT on applicable sales and services, if the business generates sales of over £82,000 a year. Not all goods and services have VAT applied to them, and there are a variety of rates – the standard rate of 20%, reduced rate of 5%, or even a 0% rate (we know this sounds absurd). Calculating and paying VAT can be one of the most complex aspects of taxation if you offer a variety of goods and services, so we’d recommend seeking advice from our qualified chartered accountants, who cover Windsor, Maidenhead and all surrounding areas.
Business Rates – If you operate retail premises or an office, there’s a good chance you’ll have to pay business rates, a form of property taxation. Certain buildings are exempt from this levy, while others are able to seek relief and pay a reduced sum. Many home businesses around Windsor and Maidenhead qualify for exemption, but if you have employees working from your home or sell goods/services directly to visitors, this might not be the case.
As you can see, business taxation is relatively straight-forward but there are still certain variables in the form of rules that only apply to certain types of business. Hiring a team of chartered accountants, like the ones at Higgins Day near Windsor and Maidenhead, can help you navigate legislation. We’ll help you minimise your tax bill, while staying 100% compliant. After all, businesses that fall foul of tax law can end up in hot water and in extreme cases, can even go under.
It’s our aim to shoulder all matters of taxation on your behalf, so you can have peace of mind that you’re not paying too much, submitting an inaccurate bill, or failing to submit on time. So why not give us a call today?