What is the Construction Industry Scheme (CIS)? The Construction Industry Scheme (CIS) is where contractor withholds an amount of payment from their subcontractors as tax, which is then paid to HM Revenue and Customs (HMRC). It is similar to when an employer deducts income tax from an employee’s wages on their behalf. How does the…
As your business grows and becomes more successful, you will find a point where it would be beneficial to have some regular help. Most commonly this would involve employing someone to work for you. Aside from the obvious factors such as what you want the employee to do, there are seven points you must address when…
What is VAT? This post will explain everything you need to know about Value Added Tax in the UK.
Have you started a new business recently? Or began letting a property to increase your income? Then you will probably need to register with HRMC to submit your self-assessment tax return. Registering for self-assessment tells HMRC that you: This is compulsory and can lead to penalties and issues if you do not register for self-assessment…
There are two main methods to take income from a company you own: Dividends Wages Each of these methods have their own advantages and disadvantages. What are Dividends? Dividends are payments used to distribute a company’s profits between its shareholders. They are issued after tax and require a company to have a positive balance of…
In addition to income tax, individuals have another amount to pay on earnings known as National Insurance Contributions (NICs). NICs are similar to tax except that paying them allow you to qualify for certain benefits. Which benefits are linked to National Insurance Contributions? NICs mainly cover the state pension, as well as additional and new…
In addition to the standard method of accounting for VAT, where you add 20% onto sales, pay this to HM Revenue and Customs (HMRC) and claim back the VAT on your purchases, there are other methods you can use. There are three main methods for calculating VAT; the flat rate scheme, the cash accounting scheme…
In addition to the traditional accounting method for keeping records, there is the Simplified Expenses Method. This can be used by Self-employed businesses and sole traders. How do simplified expenses work? The simplified expenses method works by using flat rates to calculate a number of expenses instead of recording the actual expenses. Which Expenses Can…
Late submission or payment of self-assessment tax return deadlines and penalties can be a costly mistake for sole traders and businesses. HM Revenue and Customs (HMRC) created the Self-assessment model to allow people to file tax returns and disclose their taxable earnings. This means tax can be charged correctly without investing in a complicated way…
What is Capital Gains Tax? Everyone has items that are no longer wanted, items to sell to other people and possibly made a profit. In most cases once the sale transaction is complete nothing else needs to be done. However when we are selling expensive items, such as shares in a company or even a…