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+ FINANCIAL MATTERS





        Business taxes for beginners


        Expert guidance for new entrepreneurs

        As the UK economy recovers from   Redfern stated, ‘The very first   as well as filing a Corporation Tax
        the Covid-19 pandemic, many   decision to make when looking at   return with HMRC.’
        people have been inspired to   accounting for your new business   Entrepreneurs who prefer the
        start a new business as a result of   is how you will structure that   limited company option will need   Corporation Tax will be due nine
        employment changes resulting   business. If you are a sole trader   to register the company and   months and one day after the
        from the pandemic. But while   or form a business partnership,   director details with Companies   end of the company’s accounting
        those planning start-ups tend to   you may decide that using Self   House.       period.
        focus on products, pricing, and   Assessment is the simplest and   Depending on how the business   Business profit will be
        marketing for their new ventures,   easiest way to account for and   is structured will determine how   determined by the amount of
        often forgotten is the financial   pay your taxes – you simply need   to account for a business’ tax   income made by the business
        aspect of business tax such as   to register for Self Assessment   liability. Sole traders and business   minus any business expenses.
        what taxes business owners will   and then complete your tax   partnerships will need to submit   Expenses incurred by the
        be liable for and how they will   return in time for the 31st January   a Self Assessment tax return   business should be deducted
        have to pay. David Redfern, tax   deadline. You can even use simple   by 31st January following the   before tax liability is calculated.
        preparation expert and Director   cash basis accounting, which   end of each tax year, detailing   Redfern stated, ‘Ensuring that
        of DSR Tax Refunds Ltd, offers his   for some forms of business may   their income and business   all legitimate business expenses
        guidance to business beginners.  be the best option. However,   expenses. HMRC then calculates   are accounted for can make all
          Business taxes for any business   forming a limited company can   how much tax and National   the difference for a fledgling
        venture will be determined by the   have advantages for would-  Insurance is owed and issues a   business because unaccounted
        way the company is structured.   be entrepreneurs, in terms of   tax bill. Business partners will   expenses will eat into profit
        Those businesses based around   personal liability if the business   be required to submit individual   margins. Legitimate business
        a sole trader or partnership will   fails, as well as paying your tax   tax returns for each partner   expenses will include not only
        need to account and pay tax   liability via Corporation Tax, but   as well as one which relates   the expenses directly involved
        via the Self Assessment scheme   this option is far more complex   to the business partnership.   in the running of the business,
        whilst those entrepreneurs who   in terms of accounting and you   However, Corporation Tax   such as premises, staff and
        form a limited company will need   will need to file a set of company   differs significantly from Self   stock, but also those indirect
        to register and pay Corporation   accounts with Companies House   Assessment.    expenses such as accounting fees,
        Tax.                                                   Redfern explained, ‘Corporation   insurance, advertising costs and
                                                              Tax is paid on profits made by   so on – making sure all of these
                                                              the company and the timing of   are included in your tax return
                                                              any tax requirements is based   will make your business far more
                                                              on the accounting period of   profitable.’
                                                              the business in question unlike   Business expenses must be
                                                              Self Assessment, which has   solely related to the business
              Total Website Management                        fixed deadlines under which to   – no personal expenses can be
                                                              register and file tax returns. If your
                                                                                         included as tax relief.
                                                              business has an accounting year   Contractors, especially those
                                                              which runs from 1st July to the   working within the construction
                                                              following 30th June, that will also   industry, who require guidance
                                                              be the period for which you will   and assistance with their
                                                              need to account for and pay any   allowable business expenses, are
                                                              due Corporation Tax. A significant   encouraged to contact DSR Tax
                                                              difference for Corporation Tax   Returns Ltd on 0115 795 0232
                                                              is that the company needs to   or via their website for help with
                                                              calculate their own tax bill based   their tax returns.
                                                              on their company tax return.’



                                                              Family-owned businesses
                                                              report their accounts more
                                                              conservatively

                                                              Family-owned businesses are much more conservative when it comes
                  Work   Made   Simple                        to their accounting reporting than non-family corporate organisations,
                                                              potentially hindering their reported profitability, but also improving
                                                              the company’s long-term reputation, according to new research from
                     QUAYSTONE: THE POWER BEHIND              Durham University Business School.
                         www.bizmag.co.uk
                           www.bizmag.co.uk
                                                               The study also found that family firms with a founder CEO are more
                  www.quaystonesoftware.com
                  www.quaystonesoftware.com                   likely to report conservatively than those with a descendent CEO.
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