Each individual is responsible for direct and indirect taxes throughout their life. Annual Returns are submitted to HMRC detailing individual financial details and should include all taxable earnings.
Income tax is the most recognisable direct tax and is based on one’s earnings and or remuneration. Calculating the correct amount to be paid depends upon a individual’s tax code and threshold as well as any relief or benefits that are in receipt. All income must be reflected in the tax return to establish the correct amount of tax due to be paid. Income from saving and investments are also subject to taxation and need to be declared as does any income from other sources, such as property rental (buy to let).
Personal tax also includes capital gains tax and inheritance tax. Any profit made from capital transactions, most typically buying and selling a property, are subject to this tax payment. Inheritance tax is payable on sums left to the beneficiary and will also need to be reflected in the annual return if applicable.
VAT is an example of an indirect tax and payable as part of a purchase and is not included within personal tax forms.
Learn more about Personal Tax here.
Corporation Tax is payable for any UK operating business, Limited Companies, Limited Liability Partnerships, Co-Operatives, Clubs and Community Groups.
Businesses are required to register at the start of their operational life, keep accounting records and file returns by the company’s specific deadline. The standard accounting period is 12 months and returns need to be submitted within the next financial period so that Corporation Tax can be paid within the next 9 months following the financial period if required.
Areas that are taxed include operational profits, selling of company assets and income from investments.
VAT will need to be accounted for within business transactions and be part of the annual financial statements.
To find out more about Business Tax, click here.
Seeking Professional Assistance
The brief summary above only covers the most basic details of UK taxation laws, the intricate and complex nature of the modern tax system means that it’s best to seek professional help from Chartered Accountants.
Dyer & Co provide a friendly, informative and highly professional service that can help both the individual and companies. Businesses can find advice for all stages of their development (such as help with registering for corporation tax) through to the day to day workings that any company experiences.
Businesses can receive help from their very conception. Starting a business is a daunting prospect but with expert advice, the process can be made less strenuous and can help to avoid any oversights that may occur. Dyer & Co is available to provide a tax advice service throughout a business’s operational life and deal with any significant internal changes such as acquiring parts of another business or selling off parts of their own.
The self-employed can find peace of mind and a way through the many classifications of taxation that may befall them by using a reliable accountant. Not only will it allow the individual to focus on their business with the knowledge that the taxation side of the business will be looked after correctly but it also allows for more time to drive the business forward. It can also help save much time and even penalties for incorrectly completed returns or missed deadlines.
For more advice, please contact us now.