Paying Tax As A Small Business And How To Claim Back UK Tax

Paying Tax As A Small Business

As a small business owner or sole trader, you must pay personal income tax. Learn here about the type of tax applicable and conditions to claim back UK tax

Any profit you make on your business must be declared to HMRC. But first you must register your new business and choose the appropriate legal structure, which will have a bearing on the amount of tax you pay. 

Getting some valuable UK tax advice is highly recommended. As a leading tax refund agent in the UK, Taxback has helped many small business owners to not only pay tax on time, but avoid penalties and claim back tax, for greater savings.

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Registering As A Sole Trader And Paying UK Tax

If you are starting a new business you must get registered as a self-employed ‘Sole Trader’ with HMRC. This is the common choice amongst over 60% of the UK’s self-employed population. 

As a sole trader, you will pay more tax and be solely responsible for any debts your business incurs. But registering as a sole trader cost less, is faster and demands less administrative taxes to be paid. For a full understanding of taxes, a sole trader pays, come in for a consultation and let us help you choose the best and least taxable path.

Paying Tax As A Private Limited Company

If you register as a limited company your business must pay a ‘Corporation Tax’ on profits. As proprietor you must pay employees NIC’s which is 13.8%, provided their earnings are over £166 a week.  (subject to change according to law) As shareholder within the company, when the money is available you may pay yourself dividends. The initial £ 2000, on dividends is tax free. There are bands which determine tax factors, get help from our tax consultants and pay only the minimum tax and save.

Related Post: Have You Missed Your Tax Return Deadline – And Your UK Tax Refunds?

Paying UK Tax On A Partnership Business

If you are in a partnership business, its likely you are already paying a self-employed tax. This income tax will be calculated on profits and percentage of profits shared by each partner. First, any taxable income, such as allowances are calculated. You must know the taxable band for ‘Personal Allowances’ is anything over £12,500. Less and you do not have to pay income tax for allowance.

Don’t make paying tax on your small business a hassle.

The amount of savings you gain through our expert advice will be much higher than our standard fees. Remember our sole aim is to make sure you hang on to as much of your hard earned money and pay the taxman only what’s due!

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