Under the tax law in the UK, you need to register any new business. And before you do that, you must choose a legal structure. Whatever legal structure you pick, you need to know which business tax UK rates you’ll pay.

How to determine the best legal structure for your new business?

 Your preferred legal structure can impact the tax you pay. It also shows how much responsibility and authority you have over your business.

Here are some factors to consider when it comes to business tax in the UK:

  • Are you starting a joint business partnership or sole proprietorship?
  • Do you need a financial admin?
  • Are you comfortable with a low and high personal financial risk
  • What will potential investors and customers think of your business?

Yes, business tax can be complex, particularly when you want to monitor all the taxes that apply to your company.

 Let’s take a look at some business tax UK that you may need to pay, including how to pay and deadlines.

  1. Income tax

An income tax is taxed on entities and people and it differs with individual income or profits. Note; not all sources of income are taxable; however, you may need to pay tax on:

  • Self-employed income
  • Rental income
  • Most pensions
  • Job benefits… and so much more.

There’s a specific amount of tax relief available, meaning you won’t need to pay the first £1,000 of your self-employed income. It is called ‘trading allowance.’ Click here for more reliefs and allowance.

How to pay

Payment is often through Self Assessment. All you have to do is file a tax return each year.

The deadline for payment

  • Online tax returns – 31st of January
  • paper tax returns – 31 October

Note that the tax return you file is for the preceding tax year, and not the present year since each tax year covers April 6th to April 5th.

  • Corporation Tax

You pay Corporation Tax on profits from:

  • Running a foreign business with a UK office.
  • A co-operative, club, and other associations that aren’t formed into a legal corporation.

How to pay?

Once you’ve registered, click here, and it will take you to a log-in page where you can pay.

What’s the deadline?

The filing deadline is 12 months after your accounting period has ended.

  • VAT (Value Added Tax)

If your company offers any service or sell any product, you need to charge your customers VAT. Next, you’ll need to pay any value-added tax due to HMRC and submit the VAT profits.

The normal VAT rate is 20%. However, some products will have decreased or exempted rates.

While registering your company for VAT can be done at any time, if your gross revenue is over £85,000, you must register it immediately

The deadline

The deadline for (submitting your return and paying your tax is sane – 12 months and 7 days after the accounting period ends.

  • Business rates

If you’re running your business on a non-domestic property like an office, a shop, warehouse, pub or guest house, you may need to pay business rates.

How to pay

Your local council will send you a bill in February or March every year, which will be for the forthcoming tax year.

The deadline

It depends on your local council, but you’ll see the deadline on your bill.

Need an accountant? Our licensed accountants are proficient to give practical counsel to help you manage your business efficiently. We will help you follow tax legislation so that you can focus on other things.

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