Navigating tax obligations is crucial for small business owners in the UK, as failing to comply can lead to penalties. For most UK businesses, taxes include Corporation Tax, VAT, and PAYE if there are employees. Corporation Tax, currently set at 19% for small businesses, is levied on all profits and must be reported annually. Keeping accurate records throughout the year can significantly ease the tax filing process.
If your business has an annual turnover exceeding £85,000, VAT registration is mandatory. VAT impacts pricing and cash flow, so planning for it is essential. It’s critical to stay up-to-date with HMRC guidelines, as VAT regulations are subject to change, and the penalties for non-compliance are steep. For many small businesses, seeking support from an accounting firm like Mershaw Accounting can be invaluable to maintain compliance and reduce the risk of fines.
PAYE tax is another responsibility for employers, requiring deductions from employees’ salaries for Income Tax and National Insurance. Setting up PAYE correctly is essential to avoid payroll issues, which can disrupt cash flow. Mershaw Accounting offers tailored tax planning and payroll management services to simplify these tasks, ensuring your business stays on track.
Understanding and managing tax obligations doesn’t need to be overwhelming. With the right guidance, your business can thrive while staying compliant. Mershaw Accounting specializes in supporting small businesses with customized tax solutions, allowing you to focus on growth and profitability.
Disclaimer: This article is intended for informational purposes only and does not constitute professional advice. Mershaw Accounting assumes no liability unless we are formally engaged to provide tax services.