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Taxes

On Cloud 9 Accounting Taxes

No need to drown in Tax​

There are six main taxes

  • Corporation Tax

  • VAT

  • Employer National Insurance

  • Income (Dividend) tax

  • Auto Enrolment (Pension tax)

  • Entrepreneurs Relief

What taxes will you face when running a Limited Company?

  • Corporation Tax

  • VAT

  • Employer National Insurance

  • Income (Dividend) tax

  • Auto Enrolment (Pension tax)

  • Entrepreneurs Relief at the end

Corporation Tax (CT) is a tax on your profits; they are taxed at 19%, make £100k, and CT will be £19k; CT is paid nine months post your year-end.

VAT, Value Added VAT is paid on your sales; if you turn over more than £85k, you must register for VAT (you can register to pay this before you reach £85k). VAT can be reclaimed on all your vatable expenses, e.g., a van and office costs. It's usually paid quarterly, so let us help you ensure it's correct and you have saved for the bill.

Employer National Insurance (ER NI) is payable on what you pay your staff; ER NI is payable at 13.8%, so when you recruit, please bear in mind this hidden tax

Income (Dividend) tax is paid when you tax money out of business in the form of Dividends; the first £2,000 is tax-free them your pay 8.75% up to £50,000, then 33.75% for Dividends above that

Auto Enrolment (Pension tax) staff are automatically enrolled into a pension scheme, and you must contribute to that pension, another stealth tax. Your team pays 5%, and you must contribute 3% of those wages, another hidden recruitment tax.

Entrepreneurs Relief (ER) is quite a good tax; at some point, you may wish to sell some/all your business. The gain on this sale can be taxed under ER at 10%. E.g., if you made £500k from selling, you would have to pay £50k in ER tax.