Specialist tax lawyers Kangs Solicitors provide some key tips on tax issues for businesses in the UK
When it comes to the tax man, there are some things any business owner needs to know to keep things on the straight and narrow.
Tax issues can be exceedingly complex. There are different types and levels of tax. For instance if your business is a limited company then it is liable t pay corporation tax on its profits, be they from trading or from the sale of assets. Currently that is at 19 per cent.
But this rate is due to be increased to 25 per cent in April 2023 for companies with profits above £50,000.
Then there are other taxes. In the UK basic UK taxes include income taxes, property taxes , capital gains, UK inheritance taxes, and Value Added Tax (VAT).
Working out just how to make sense of the tax regime and how to deal with issues so they do not become a problem is something any business needs to do.
But we\’ll try and make it as easy as possible for you. We\’ll start with some basic information about how HMRC operates and then dive into all the ins and outs of what you need to do to comply with HMRC\’s rules and regulations.
1- Make Sure All Required Information Is Included In Your Vat Returns
If you run a business, you\’re required to file VAT returns. It is an essential part of your tax obligations and something you\’ll have to do at least once every calendar year.
There are two main ways to prepare your VAT return: manually or online. If you do it manually, ensure all required information is included in your returns. You\’ll need to provide information about where the goods or services were sold and the price you charged.
If you choose to use an online tool, check its instructions carefully for any specific requirements for filling out the return.
The information you need to provide in the VAT returns is essential because it will determine if you are liable for VAT and your rate.
2- File Them On Time And Keep Track Of What\’s Coming In And Going Out, So There Are No Surprises At Tax Time
When you run a business, you want to pay as little tax as possible, right?
And that\’s why you need to be on top of your filing situation.
One way to do this is by keeping track of what\’s coming in and going out of your business, so there are no surprises at tax time. If something seems off, like an expense that doesn\’t seem to match up with what\’s coming in, it might be worth investigating.
3- Hire an Accountant
If you don\’t have the time, money, or inclination to learn the ins and outs of accounting, you might want to consider hiring an accountant.
The best thing about using an accountant is that they can help you ensure your tax liability is as low as possible without sacrificing any cash flow.
An accountant can also help you navigate any thorny issues that come up during the year, such as how to handle VAT refunds or how long it will take for your business to be taxed again after it changes ownership.
4- Get Legal Advisers Onboard
Getting legal advice is a crucial step in the business planning process. It\’s essential to have an experienced legal team on board, as they are the ones who can help you navigate the often-complicated tax system.
If you\’re looking for a way to legally justify your business model and keep track of your company\’s financial transactions, it\’s best to get in touch with specialist UK tax lawyers such as Kangs Solicitors early on.
Not only will this help you understand what kinds of expenses can be claimed as business expenses, but it will also help inform any future tax planning decisions that might need to be made.
And reducing tax liability is something that needs to be done with proper advice to avoid problems.
Businesses have various opportunities to reduce their tax liability such as employing family members, starting a retirement plan, altering the business structure, making proper deductions and so forth. But all of this requires careful thought and application of the correct accounting and legal principles.
5- Avoid Penalties
If you\’re a small business owner, it\’s easy to get wrapped up in running your business and lose track of the little things that can add up.
One of those things is penalties. The HMRC has several pages dedicated to tax penalties that you should be aware of if you run a business.
The sections have information about how penalties work and how to avoid them.
Conclusion
Business taxes are complicated. So, make sure you have a professional person handling your taxes. You\’ll be able to take some of the stress out of filing and ensure that your business is on track for success.
