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How Does VAT Work For Your Business
Value-added tax (VAT) is charged on most goods in the UK. Some goods are exempt, and others have lower rates added to them, but most are charged at the standard VAT rate of 20%. Many very small businesses don’t need to register for VAT, but once your annual turnover passes the threshold, which is currently £85,000, it’s compulsory. You can also voluntarily register before reaching the threshold, which is useful for some businesses so they can get in the habit of charging VAT. If you’re wondering how does VAT work, take a look at the information below.
Business Motoring – Tax Aspects
This factsheet focuses on the current tax position of business motoring, a core consideration of many businesses. The aim is to provide a clear explanation of the tax deductions available on different types of vehicle expenditure in a variety of business scenarios.
Corporation Tax – Quarterly Instalment Payments
Under corporation tax self-assessment large companies are required to pay their corporation tax in four quarterly instalment payments. These payments are based on the company’s estimate of its current year tax liability. Note that the overwhelming majority of companies are not within the quarterly payment regime and pay their corporation tax nine months and one day after the end of their accounting period.
Enterprise Investment Scheme
The purpose of the Enterprise Investment Scheme (EIS) is to help certain types of small higher-risk unquoted trading companies to raise capital by providing income tax and CGT reliefs for investors in qualifying shares in these companies. There are really two separate schemes within the EIS: a scheme giving income tax relief on the investment and a CGT exemption on gains made when the shares are disposed of; and/or a scheme aimed at providing a CGT deferral.
Legal Working in the UK
In line with the Immigration, Asylum and Nationality Act 2006, it is a criminal offence to employ anyone who does not have an entitlement to work in the UK, or undertake the type of work you are offering. Any employer who does not comply with the law may face a fine of up to £20,000 per offence. Further, if employers knowingly use illegal migrant labour it could carry a maximum five year prison sentence and/or an unlimited fine.
Pensions – Tax Treatment on Death
Alongside the changes from April 2015 to the access of pension funds, significant changes were made to the tax treatment of pension funds on death. This factsheet summarises the rules which may allow a pension fund to pass free of all taxes on the estate of the deceased and free of all taxes on the beneficiaries of the pension fund.