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Accountants in Preston

Business Tax

Tax in the UK is run by HM Revenue & Customs (HMRC).

This link is to the main HMRC website: www.hmrc.gov.uk

There are several UK business taxes which you will need to be aware of.

We will operate these schemes for you, or help you to operate them yourself.

We always recommend that clients have a good understanding of the various taxes.

Here is a quick list with links to more information:

Income Tax / Self Assessment

If you trade as a 'sole trader', this means that you are self-employed and have your own business and are not trading through a limited company.

As a sole trader your profits will be assessed under Self-Assessment Income Tax.

Corporation Tax

If you trade through a limited company your profits will be assessed under Corporation Tax.

VAT (Value Added Tax)

VAT is a sales tax. If you are VAT registered you must charge your customers VAT on your sales to them for 'VAT-able' goods and services.

In most cases you will be able to claim back the VAT which your suppliers have charged you.

You must register for VAT if your annual turnover exceeds 77,000 (2012./2013).

If your turnover is below this, you may register voluntarily if you think this is to your advantage.

PAYE (Pay As You Earn)

If you employ people, whether as a sole trader or a limited company, you will need to register a PAYE scheme and deduct Income Tax when you pay your employees.

If you are a sole trader, you personally are not an employee. You will not need to register for a PAYE schemeif there are no other people working with you or for you.

CIS (Construction Industry Scheme.

The Construction Industry Scheme (CIS) is the HMRC tax system for Contractors paying Subcontractors in the UK construction industry.

The CIS scheme will often require a Contractor to withhold 20% tax on the labour part of the Subcontractor's charges.