When you start a business, you primarily want to make a profit.  This is the case if it’s just you involved, or if you have shareholders or partners.  Sometimes, however, the business is built up so that it can be sold for a capital gain.

Either way, we work closely with our clients to provide specific tax advice so that tax saving opportunities can be identified as and when they arise so they are dealt with in a timely and tax efficient way (rather than accountants simply working out any liabilities during the completion of a tax return).

We can help you achieve what you really want from your business and your life.  By focusing on integrating life planning, financial planning, independent financial advice and investment management, we can help you achieve not only what you want from your business, but also from your life.

Small business owners have an extraordinary list of responsibilities and tasks that they must fulfil and complete if they are to ensure that their venture is successful. Aside from the actual running of the business and the completion of all the work that entails, there is a huge variety of ‘behind the scenes’ tasks that can make or break a business. Tax is amongst the most important of these.

Inefficient tax management can easily destroy an otherwise viable company. Unless you budget well for your tax liabilities, and tax steps to minimise your bills, it is perfectly conceivable that your organisation could have its cash flow constricted to such a point that it is no longer possible to operate your business.  Tax help and tax advice from a financial planner is strongly advisable.

The form of business you operate determines what taxes you must pay and how you pay them. The following are the some general types of business taxes.

Income Tax

All businesses except partnerships must file an annual income tax return.  Partnerships file an information return.  The form you use depends on how your business is organised.

• Sole trader: You’ll need to register as self-employed and pay personal income tax on all profit you make
• In a partnership: The partners are assessed separately and pay tax on their share of the profits
• Company director: You’re also an employee, so you’ll pay tax on the salary the company pays you

Corporation Tax

If your business is a limited company you’ll need to pay corporation tax on your taxable profits. This is fairly complicated, so seek the advice of a tax accountant.  If you do not know one we can of course refer you to one.

National Insurance Contributions (NICs)

Most people who work have to make these contributions, and there are strict rules that apply.

Capital Gains Tax (CGT)

Capital Gains Tax is levied if you sell an asset like a property for more than you paid for it. You can offset any capital gain with certain expenses and taper relief, which will decrease the amount of tax you’ll pay.

Value Added Tax (VAT)

You must register to pay this tax on the sale of goods or services if your annual taxable turnover is more than £73,000. If it’s less you still may choose to register – if you pay a lot of VAT on raw materials you can claim it back once you register.

Inheritance tax (IHT)

If your business is a large part of your personal estate, you’ll need to plan for inheritance tax. Currently 40% of an estate above £325,000 goes to the taxman.

Most business assets qualify for 100% business property relief, which means no IHT is due on them. But the rules are complex, so you should consult a tax specialist.

These are just a few of the taxes involved running a small business.  Good financial advice and tax advice from a financial planner is essential.

Any questions on Small Business Tax?

Please call us on 01582 839280 or Email us.