There are several types of Income tax, which include National Insurance Income Tax (NIT), Corporation Tax, Capital Gains Tax and Excise Tax. These are only a few of the many forms of tax that are due on a regular basis, so if your business has been established for more than 6 months you will need to make sure you’re aware of what forms of taxation apply to your circumstances.
You may also be charged with Capital Gains Tax on the sale of assets you’ve bought. This can be a very high percentage and is usually applied at the end of each calendar year.
A good tax accountant can help you understand the different tax forms and also advise you on how to minimize your liabilities and reduce your tax bill. An accountant will help you take out tax reliefs which can lower the amount of tax you owe by as much as sixty percent in some cases.
If your business is still under construction or just starting out you may not need to worry about a lot of paperwork. If, however, your company is running on full time and you already have a large number of employees you will require tax help. It is very common for small business owners to use a personal allowance and use this to pay their wages and bonuses. If you have a lot of employees working for you, it is worth checking out whether you have to pay the National Insurance contributions each week.
Some companies don’t pay their workers any National Insurance contributions while they work, but many do. If you have employees who are not making any contributions and you pay the NIS they may end up paying a lot more money in tax than the average person.
If your company has a larger number of employees, this can add up very quickly, particularly if you pay them on an hourly basis. So you should be prepared to have a number of payroll officers to ensure that everyone is paid in the correct way.
It can be quite easy to lose track of your tax returns and forget to pay certain amounts, and this is why you should always check your tax returns carefully and get any additional tax you might be required to pay, before the deadline. If you do pay out a large amount, then you may find yourself having to pay out more in tax refunds as well, so always double check and make sure you don’t miss the deadline.
There are a number of tax reliefs which are available to you, and if you have a good accountant you should never have any problems finding them. The most popular tax reliefs include the reduction in your income tax liability and relief from capital gains tax, as well as relief on Corporation Tax and National Insurance contributions.
When you are looking for tax relief, you will also need to be aware of the different types of relief, which include: reduction of total income tax liability, and reduction in the liability for Corporation Tax. If you choose the reduction route you will be able to save a lot of money on tax, but it may be possible to lose out on National Insurance contributions too. So it is always worth comparing the various options, before choosing one for you business.
You may also need to make sure that you are only allowing a certain percentage of your earnings into your personal allowance when you pay your wages, bonuses and other employee expenses. This will allow you to keep more of your earnings for yourself.
If you choose to use an accountant for all of the aspects of tax planning and tax relief, you will find that they are able to give you detailed advice on how best to take advantage of these tax relief options. Many times a good accountant will be able to give you an overview of your financial situation and advise you on what options are available to you.