Tax Advice For Limited Companies
Taxes are something that the vast majority of UK limited companies have to pay. It's important that you pay everything you need to in order to avoid legal difficulties. This article takes you through the most important taxes you need to be aware of. Probably the main tax burden for a lot of UK companies is corporation tax. This is calculated based on your profit and turnover, and you can normally work out what you own through a self-assessment process.
Your company will also need a Pay As You Earn (PAYE) system if you have employees. This is how your employees' income tax and national insurance contributions will be made, unless they are exempt from payments or don't earn enough to qualify to pay them. The aim of the PAYE system is to streamline the tax process by allowing deductions to be made directly from the paychecks of your company's employees on a monthly basis. A PAYE system is something most companies need to have.
It is also likely that your limited company will have to make national insurance contributions too. This will normally be based on the salary and any other benefits that you might pay your employees. Some of the contributions you need to make will be calculated and paid to Revenue and Customs at the end of every tax year, although some of the contributions can be calculated at the same time as your other PAYE contributions, which can help to make the payment system somewhat easier for you.
Your business will also probably have to pay local business rates, which go towards things such as maintenance of public areas. This helps to make sure your local environment remains clean and safe for your business to operate in. The local rates are determined by the local authority and the money is held in an account owned by the Department for Local Government before it is distributed back to the local area. You'll probably have to pay this if you have production, retail or office premises.
There are also some miscellaneous taxes that UK limited companies will need to be aware of in case they ever need to pay them. For example, if your company ever sells any assets then you might need to be aware of capital gains tax. When you're making purchases, you should also remember to take VAT into account. If you're unsure of your tax responsibilities then it is definitely worth seeking financial advice to make sure you have got all your bases covered.
Your company will also need a Pay As You Earn (PAYE) system if you have employees. This is how your employees' income tax and national insurance contributions will be made, unless they are exempt from payments or don't earn enough to qualify to pay them. The aim of the PAYE system is to streamline the tax process by allowing deductions to be made directly from the paychecks of your company's employees on a monthly basis. A PAYE system is something most companies need to have.
It is also likely that your limited company will have to make national insurance contributions too. This will normally be based on the salary and any other benefits that you might pay your employees. Some of the contributions you need to make will be calculated and paid to Revenue and Customs at the end of every tax year, although some of the contributions can be calculated at the same time as your other PAYE contributions, which can help to make the payment system somewhat easier for you.
Your business will also probably have to pay local business rates, which go towards things such as maintenance of public areas. This helps to make sure your local environment remains clean and safe for your business to operate in. The local rates are determined by the local authority and the money is held in an account owned by the Department for Local Government before it is distributed back to the local area. You'll probably have to pay this if you have production, retail or office premises.
There are also some miscellaneous taxes that UK limited companies will need to be aware of in case they ever need to pay them. For example, if your company ever sells any assets then you might need to be aware of capital gains tax. When you're making purchases, you should also remember to take VAT into account. If you're unsure of your tax responsibilities then it is definitely worth seeking financial advice to make sure you have got all your bases covered.