If you are self-employed and earning more than £1,000, a partner in a partnership business, a company director or if you have other income from savings, investments or property, you will need to file a Self Assessment Tax Return (SA).  The following article will show you how to reduce corporate taxes.

The SA is not a tax itself, it is a way of calculating and paying tax. If you fit into one of the categories above you are wholly responsible for completing a SA each year and for paying any tax due. To be clear, HMRC will not prompt you to complete a tax return. If HMRC do however send you a SA to complete, this must be completed and returned by the due date and not be ignored unless you have agreed with HMRC directly to cancel it.

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As a business owner of a limited company, you will be working hard to grow and be profitable whilst being aware of tax reliefs available and tax charges liable by you personally and your business.

All profits you make in your limited company are subject to a corporation tax rate of 19% in the current 2019/20 tax year.  If you want to pay your corporation tax bill early with HMRC so as to plan ahead and not get caught out by a hefty tax bill later in the year, you have the option to pay your corporation tax bill early, with the added incentive of being rewarded with interest on early repayments.

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There are many advantages of having a sole trader structure for your business with the main one being the simplicity of business administration versus a limited company set-up.  However, as your business thrives and grows the potential next step to limited company status can provide credibility and attractiveness as an established business to your customers, whilst also very importantly providing an opportunity to review your tax position.

There is a balance to be struck when considering the change from sole trader to limited company.  At a certain point you will need to consider if you are overpaying tax as a sole trader and it may be more tax efficient to move to a limited company structure.  The rule of thumb is when your turnover reaches around £30,000 per year, you should start to consider limited company status.  At this relatively low threshold of turnover you may still wait before making the transition, as there are various other deciding factors to consider as well as your business’ turnover.

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Running your own business is no easy task even for an experienced business owner.  At the very least, you will want to manage your business within the legal parameters set out by HMRC but also ideally, you will want to work as tax efficiently as possible whilst meet your tax obligations and keeping a good record with the taxman.

In this blog we review the typical issues that arise with HMRC that cause business owners to be unnecessarily penalised.

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What is my optimum salary level?

As a director and owner of a limited company, you are entitled to pay yourself a salary at whatever salary level you like.  However, you do need to be aware of the tax implications when making a decision on the amount you wish to pay yourself, and in this blog we review the options available to you to ensure you are working as tax efficiently as possible.

You will be aware of the tax benefits of a limited company structure, including the opportunity to reduce your corporation tax bill by paying yourself a salary and/or dividends.  Another significant advantage of paying yourself a salary is that if you do so at the Lower Earnings Limit currently set at £6,136 for the 2019/20 tax year, you will be entitled towards a state pension at retirement.  This low level of salary therefore is a good starting point when deciding the level of salary that works best for you.

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You can qualify for up to £3,000 per year in tax relief

On occasion, HMRC provides one-off exemptions to UK companies, for example, tax-exempt staff Christmas parties, whereas the Employment Allowance is just that – an annual allowance to eligible employers of up to £3,000 in a given tax year via a reduction of Class 1 Employer National Insurance Contributions (NICs).  The Employment Allowance was introduced in 21014 to encourage recruitment by UK firms, and specifically for small businesses to stimulate economic growth.

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To be a contractor often means that you have to understand precisely how your position works within the confines of the law to ensure you operate legally.

However, the government reforms of working roles which are off-payroll, known as the IR35 legislation, currently in place for public sector companies and to be rolled out to the private sector this time next year, means that any contractor has to stop and think carefully about how they operate to make sure they’re still working within the confines of the law.

We’re going to be taking a look at whether you can continue to act as a limited company in spite of these new changes.

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If you are self-employed and work from home there are expenses that you can claim for, although the rules set out by HMRC are complex and detailed and therefore each claim should be given due consideration being careful to keep within HMRC rules.

In this blog, we look at the key expenses where it is possible to claim as an allowable expense whilst working from home. As this is a complex subject, we do suggest calling us for information to receive tailored advice on your own personal circumstances.… Continue Reading