Tax and VAT
As a business owner, you will be subject to Tax in some form, whether that is paying it or notifying HMRC why you are not liable (usually through a Tax return.)
There are various allowances which can help minimise tax liabilities but understanding what they are and which ones you are entitled to can be overwhelming.
Most Common forms of Tax
There are several common forms of tax. These are:
- Corporation Tax generally becomes payable when your business makes a profit
- Capital Gains Tax Planning (CGT) is a form of taxation that you may be liable to pay if you sell on certain assets for a profit.
- Personal Tax (including sole-traders and partnerships)
- Value Added Tax (VAT)
Each form of Tax has various deadlines and responsibilities which taxpayers need to be aware of.
Tell me more about VAT…
Value Added Tax aka VAT is a tax that businesses charge and pay on services or goods however, it is a common misconception that if you have a business that you automatically need to be VAT registered and charge/pay VAT. The tax that is collected by a business needs to be paid over to HM Revenue and Customs (HMRC).
Not all businesses are required to register for VAT, although some choose to do this as there may be benefits for the business. Only those businesses which reach the thresholds set by HMRC are required to register.
VAT is charged on certain items such as:
- Business sales
- Hiring or Loaning goods to someone
- Selling business assets
- Items sold to staff
- Business goods used for personal reasons
- ‘Non-sales’ eg bartering, part-exchange and gifts
If you’re a VAT-registered business you must report to HMRC the amount of VAT you’ve charged and the amount of VAT you’ve paid. This is done through your VAT Return which is usually due every 3 months.
Choosing the right VAT scheme is essential as it can lead to tax savings and a massive reduction in your bookkeeping responsibilities. A few of the most popular VAT schemes that are available:
Needless to say, late VAT registration, errors, late VAT returns and late VAT payments can all lead to penalties and possibly interest being charged.
The focus on tax compliance is increasing as HM Revenue & Customs (HMRC) no longer need a valid reason to start an investigation. This means that potentially, everyone is at risk of being investigated.
Being the subject of a Tax Investigation by HMRC can be extremely stressful and you need an advisor who knows HMRC’s processes thoroughly to help ease you through the investigation with minimal worry to you.
Are you about to be the subject of an investigation? Call Tidy Numbers on 01604 494687 for expert help and support.
Isn’t HMRC there to help me sort that out my Tax?
HMRC have helplines available to assist tax payer but their staff members are not there to provide advice on how to minimise the amount of tax you will pay. HMRC have attempted to simplify the tax system but the truth is; it’s still far too complex for most people.
That is where we come in. We interpret the tax legislation and provide professional advice so that you only pay as much tax as you are legally obligated to.
How can Tidy Numbers help me?
At Tidy Numbers we work hard to ensure that you keep more of what you earn by making the most of the allowances available to you and look at your business structure to make sure it’s the best way for you maximise and extract profits from your business.
Some of our Tax and VAT services include:
- Preparation of personal tax returns
- Preparation of business tax returns
- Tax planning
- Preparation of VAT returns
- Assistance with HMRC investigations
- Provide advice on the right VAT scheme for your business
- Assistance with VAT registration
- Advice on VAT planning and administration
- VAT control and reconciliation
- Produce your VAT returns and submit them to HMRC
- Dealing with any contentious disputes that arise with Customs.
- Attendance at VAT inspections.
- Representation at VAT tribunals.