How might NI and tax affect your business?
Here is an introduction to the different kinds of taxes that you might have to pay - working on your own or in business with others. There is
also an introduction to ways of paying less tax.
But before you read on...
...three questions you'll find helpful
As you read about these taxes, you'll find that the rules change a lot according to the answer you give to these three questions:
- Are you setting up in business as a self-employed individual, or as a company/limited liability partnership?
- Will anyone be working for you as an employee?
- How much turnover do you expect to have in your first year of business, and how much profit do you expect to make?
If you can answer these questions early on, when you read through the information, you'll find it easier to pick out how the different rules
...and one tip
Remember - the key to paying no more tax than you need to is keeping proper records.
Introduction to tax
- Self Assessment for the self -employed
We've all heard of income tax, but do you know how it works for self-employed people?
- National Insurance contributions
There are several different types of National Insurance contributions that individuals and employers might have to pay.
- How to pay less tax
A range of tax credits, allowances and reliefs are available for individuals and institutions. Do you qualify?
- Value Added Tax - VAT
If your taxable turnover hits £64,000 a year (or you expect it to), you must register for VAT.
- Corporation tax
Companies pay this tax on profits to HMRC.
- Capital Gains Tax - CGT
Individuals pay this tax if they make a certain amount of profit (gain) when they sell (dispose of) an asset.
- Stamp taxes
Stamp duty is collected on the purchase of property, stocks or shares, or when a long or high-value lease is signed.
If you import goods from outside the European Union, you may have to pay taxes on them.