Taxation: All you need to know

Taxation can be an intimidating task for most individuals and companies, the taxation companies act as an agent for HMRC and can communicate to you about any issues to you on them behalf.
The tax accountants usually specialize in:

• PAYE

Like an employer, operate PAYE as a part of your payroll. It is a system of accumulating income tax and national insurance from employment from HMRC’s system. There is no requirement for getting registered to PAYE if no employees are paid £116 or more a week, obtain expenses and benefits, having another job or getting a pension.

• VAT

Value added tax is one of the most difficult tax regimes levied on business that many businesses unwittingly overpay or underpay VAT. The tax accountants offer you an efficient cost effective VAT service, which includes:
o Helping with VAT registration
o Suggestion on VAT planning and administration
o Using of the most suitable scheme
o VAT control and reconciliation
o Assisting with completing VAT returns
o Planning to reduce future problems with Customs and Excise
o Bargaining with Customs and Excise in disputes and representing you at VAT tribunals

• Corporation Tax

The taxes levied on the profits generated by UK resident companies and on the profitability of the companies registered abroad with permanent establishments in the UK are known as corporation tax.

• Self Assessment

When income tax is being collected on your personal income by HMRC is self-assessment. Tax usually gets deducted from pension, savings and wages. Businesses and people with other income need to report it to HMRC in a tax return. If it is required to send one, fill it yourself at the end of the tax year(5th April) as applicable thereon.

• Capital Gains Tax

Capital Gains tax is a tax which is levied on selling or giving away an asset which is higher in value, you may get taxable on the profit(gain). This doesn’t levied when you sell your main home. If sold, or you are planning to sell an asset which you think may be liable to Capital Gains Tax, you need to contact your tax accountants in such case.

Guide to VAT Registration

Without registering for VAT objective a business cannot declare its VAT input paid on its business purchases and cannot levy output VAT on its supplies.

2 types of VAT Registration

1. Compulsory Registration

As the name prescribed, the business requires legal compulsion for registering for VAT. The business requires to be registered if the business taxable supplies exceed £82,000 during the previous 12 months. This is known as compulsory registration. However, no VAT registration is required if the taxable supplies in the consecutive 12 months will not exceed £80,000.
A business need to get registered for VAT if there are valid grounds to confirm that taxable supplies shall exceed £82,000 during the consecutive 30 days.
You need to register within 30 days of your business turnover which exceeds the threshold. On registering late, you are required to pay at the registration point, what you owe from when you should have registered.

2. Voluntary Registration

When the taxable supplies of a business are below than registration limit i.e. £82,000, a business decides the voluntarily VAT registration. This is known as voluntary registration.

This would be advantageous when:

• Zero-rated supplies would be made by the business. There will not be any output VAT due but all input

VAT undergone will become recoverable.

• The supplies of the business must be made to VAT registered customers. Input VAT will be recovered and the output VAT will be chargeable to those customers who can reclaim VAT from HMRC.

So at the time of registration it becomes significant to prefer that whether or not output VAT can be delivered to customers by increasing sale prices.

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