Here you will find answers to frequently asked questions. If there is no answer for your question here, please contact us. You will find our contacts here.
- What are the main tax rates in the UK in 2016?
- When are tax returns submitted in the UK?
- When must a company be registered for VAT?
- Can a company register for VAT if the directors are not resident in the UK?
- What accounting related dates are important?
- What is the dividend tax rate in the UK?
- How are company profits taxed in the UK?
- How to get started with PAYE and payroll for employers?
- How to access your accounts?
- How to get started with the annual accounting service?
1. What are the main UK tax rates in the tax year ending 5 April 2017?
- Standard VAT: 20%
- Corporate income tax (CIT): 20%
- Employer national insurance rate: 13.8% on salaries above £672 per month
- Employee national insurance rate: 12% on salaries above £672 per month, 2% on salaries above £3,583 per month
- Employer national insurance on benefits: 13.8%
- Personal income tax: 0-45% based on income level.
- Tax free personal allowances for different types of income (subject to taxpayer’s eligibility).
2. When are tax returns submitted in the UK?
Businesses need to report employees’ payments and deductions to HMRC on or before each payday.
Businesses usually submit a VAT return to HMRC every 3 months. The deadline for submitting the return and paying HMRC are usually the same – 1 calendar month and 7 days after the end of each VAT period.
You must submit a VAT return even if you have no VAT to pay or reclaim.
3. When must a company be registered for VAT?
The threshold for registering for VAT is £83,000 of taxable turnover per year (effective from 1 April 2016).
Registration threshold for distance selling into the UK is £70,000 of taxable turnover per year.
If your turnover is less than £83,000 per year, you may register for VAT voluntarily. HMRC reserve the right to reject the registration if you can’t give sufficient evidence of business activities in the UK.
If you are a VAT-registered business in the UK supplying goods and services to VAT-registered customers in another EU country, you must report those supplies to HMRC separately in addition to the VAT return filing. The frequency of the reporting depends on your turnover and the type of your supplies.
4. Can a company register for VAT if the directors are not resident in the UK?
Yes, you can still apply for a VAT number. If the company director isn’t resident in the UK, further documentation is required so that HMRC can appropriately identify the company director. VAT and PAYE registration requires a permanent place of business in the UK.
5. What accounting related dates are important?
You are required to file annual accounts with Companies House 9 months after your company’s financial year end.
You must pay Corporation Tax or tell HMRC that your limited company doesn’t owe any tax 9 months and 1 day after your accounting period end.
If your annual profits are more than £1.5 million, you must normally pay your Corporation Tax for that period in 4 quarterly instalments. First instalment is due 6 months and 13 days after the start of the accounting period.
You must file a Company Tax Return no later than 12 months after your accounting period for Corporation Tax ends.
VAT returns are due 1 month and 7 days after the end of each VAT period
6. What is the dividend tax rate in the UK?
From 6 April 2016, you won’t pay tax on the first £5,000 of dividends that you receive in the tax year. Dividends above £5,000 are taxed at either 7.5%, 32.5% or 38.1%, depending on the level of your total income. This applies to UK resident taxpayers.
7. How are company profits taxed in the UK?
Company profits are taxed at a flat rate of 20%. UK resident companies pay Corporation Tax on worldwide profits.
Non-resident companies and branches of foreign companies pay Corporation Tax only on the trading profits attributable to UK business activities.
8. How to get started with PAYE and payroll for employers?
Monthly accounting service clients are entitled to complimentary support for employer registration with HMRC. Should you have an active employer registration, we can transfer your existing payroll scheme to our software and assist you with payroll calculations and filings.
9. How to access your accounts?
Our monthly service clients have access to Xero online accounting software. Our software has all the required functionality for day-to-day bookkeeping, including sales invoicing, bank feeds and much more. Xero is fully compliant with HMRC record keeping and filing requirements.
10. How to get started with the annual accounting service?
Contact us for a quote for your annual accounts and corporation tax return. Our accounting team will confirm what accounting records and other information is required.
Please check that you have access to your company unique tax reference (UTR) and Companies House authorisation code, which should be sent to you by post from HMRC and Companies House, to ensure that your accounts and tax return can be filed with HMRC and Companies House. We can help you recover these details if required.