Tax | NatWest



 

Tax and your business

When it comes to filing taxes, many people find themselves with sweaty palms and a feeling of dread. It can be a time of panic and worry, but if you prepare properly and remain fully aware of what needs to be done, it needn’t be that way.

Whether you prefer to use a spreadsheet, or cloud accounting software, the key to efficiently dealing with all things tax is to keep on top of your finances. Have a clear record of everything, and ensure it's all recorded in one place. Stuffing receipts into a shoebox or bag is not a wise move; all this approach does is increase the amount of work you’ll need to do further down the line.

Putting money aside to pay for tax bills is also a wise move. If possible, open up a separate savings account where you can squirrel away a sum of money each time a payment enters your account. This way, you won’t be seaching for funds when that tax bill arrives.

It’s absolutely essential to keep a close eye on deadlines. Make a point of getting all loose ends sorted before these deadlines creep up. For the majority of businesses, corporation tax is payable nine months and one day after the year-end, while payroll-related tax liabilities are payable monthly. VAT is generally quarterly.

Add your signposting title here… What is tax-deductible?

Some running costs can be claimed as allowable, so it definitely pays to be fully aware of what is tax-deductible and what isn’t.

The following costs can be claimed as allowable expenses:

·         Office (stationery, phone bills, rent)

·         Travel costs (fuel, parking, fares)

·         Clothing (work uniforms)

·         Staff (salaries, bonuses, pensions, agency fees)

·         Financial (accountants, solicitors, surveyors)

·         Advertising/marketing (advertising in newspapers, free samples, website costs)

It’s advisable to research what you can/cannot regard as a tax-deductible purchase. For additional peace of mind you can speak to an accountant and get them to give your accounts and purchase history a once-over. 

More about business tax
Man using laptop
Add your signposting title here… VAT

Whatever your business structure, you will have to register for VAT if your annual turnover exceeds – or is exactly - £85,000. If you fall under that threshold, then registration is optional. 

VAT can be incredibly complicated. Percentages vary from business to business, especially following the introduction of the Flat Rate Scheme. It is most certainly worth reading about the ins and outs of this scheme by reading information on the HM Revenue & Customs document.

If you are confused about the information, or have questions that you don’t feel have been adequately addressed, you can contact an accountant and get them to break everything down to you in simple terms. Misunderstandings can result in errors being made, so make sure you understand everything that is required of you. 

You can see more about thresholds on the Gov.uk site.

More about VAT registration thresholds
What next?

Read more about the Government's Flat Rate Scheme

VAT Flat Rate Scheme

Read the dedicated HM Revenue & Customs document

HMRC document
Set Tab for lightbox