Limited Companies - Useful Tax and Business Sheets

For various reasons, every year thousands of people decide to set up their own business.  You may have been made redundant and you decide the best option is to set up a business, or you may have always wanted to run your own business, or you may have a good idea and want to develop it.  A good business idea could be an invention, a new product or service, or an original idea or solution to an everyday problem. It might also be:

• a gap in the market that you can fill
• a business related to the work you do already
• an interest or hobby that you can turn into a business

Just make sure that whatever your idea is, you need to be sure that it fits with your needs as an individual, as well as being a viable business proposition.

But usually the first question we always want answering is; how much tax will I pay? Below is the current rates of corporation tax (CT) which is the type of tax chargeable on compny profits.

Corporation Tax Rates

The main rate of Corporation Tax applies when profits (including ring fence profits) are at a rate exceeding £1,500,000, or where there is no claim to another rate, or where another rate does not apply.

* For companies with ring fence profits (income and gains from oil extraction activities or oil rights in the UK and UK Continental Shelf) these rates differ. The small companies' rate of tax on those profits is 19 per cent and the MSCR fraction is 11/400 for financial years starting 1 April 2007, 2008 and 2009. The main rate is 30 per cent for financial years starting on 1 April 2008 and 2009.

In his April 2009 Budget, the Chancellor announced that the main rate of Corporation Tax for the financial year beginning 1 April 2010 will be 28 per cent. The main rate of Corporation Tax for companies with ring fence profits will be 28 per cent.

Tax Guidance Sheets

We have produced some simple starter guides to the immediate tax matters you will face once you have formed a company.

Corporation Tax – the taxation of the companies profits. You can download the BTC Guide to the basics of corporation tax which covers a range of basic subjects including how CT is charged, CT chargeable periods, how to file a CT return and how to pay any liability arising

Pay As You Go (PAYE) – Upon incorporation you may become a director of your company. Any remuneration for this post will be covered as an employee under your company’s PAYE scheme. Download the BTC Starter Guide to PAYE which covers the basic requirements of PAYE from registration, operating a payroll scheme to the annual filing requirements.

Value Added Tax (VAT) – Many firms will find themselves subject to the VAT regime almost immediately upon incorporation. Download the BTC Starter Guide to VAT which looks at the requirements for registration, filing of returns and payment of VAT. BTC do offer a VAT registration service as part of the incorporation service; simply tick the radio button for the option as part of your formation package.

Taxation is complex, the above guides only reflect the basic requirements, and we do recommend you seek professional advice from a professional accountant in your local area. We offer a find an accountant service in your local area who will offer you a free initial consultation to discuss the requirements of your newly formed company.

You should also ask yourself these important questions and ensure that you have all the answers:-

• What experience or expertise will you bring to the business?
• Is there a market - a need for the idea, and customers who will pay for it?
• How big is the market? How will you reach it?
• Who will be your main competitors?
• What makes your idea different? What are your USPs (Unique Selling Points)?   
• What about funding?
• What might go wrong?  Do you have a Plan B?

To help you make the right decisions, we have compiled some really useful business sheets for you to download. (PDF format)

Qualities Needed to Succeed in Business

Top Tips in Starting a Business

Which Business Structure?

Choosing Your Company’s Name


Disclaimer

The information provided in the web site resources is of a general nature. It is not a substitute for specific advice in your own circumstances. You are recommended to obtain specific professional advice from a professional Accountant or Solicitor before you take any action or refrain from action.

Whilst we endeavour to use reasonable efforts to furnish accurate, complete, reliable, error free and up-to-date information, we do not warrant that it is such. We and our associates disclaim all warranties.

The information can only provide an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice.