If you are planning to set up a new business or if you already have a running business, you will need to take care of paying your taxes in time. All companies and limited liability partnerships in the UK are required to submit their accounts to Companies House within ten months of the accounting reference date.
If you have just set up your business, your first accounting period begins on the day of incorporation. The end of the accounting period is the last day of the month when the incorporation completes a year. This date or the end date of the accounting period is called the accounting reference date of the company.
If a business owner wants, he or she can change the accounting reference date. However, there is a limit to how much the date can be extended, and the number of times that a company can extend this date within a five year period. The business owner will also need to make a notice to the Registrar for changing the accounting reference date which may itself prove to be quite a cumbersome process for someone who is not aware of all the tax rules.
Any business will have to pay a number of taxes. The main business taxes include income tax, corporation tax, and VAT. The legal status of the business, its annual turnover, and its taxable profits will determine which taxes the business owner will have to actually pay. These are the factors which will also determine which payment processes you will need to use.
For example, if you work only within the UK, you may have to pay VAT. If you are importing or exporting goods from outside the European Union, there will be different VAT rules that will need to be considered.
Similarly, if you fall under the category of self-employed or are a partner in a business partnership, you may just need to calculate a self-assessment tax application. For those who operate in the construction industry, the construction industry scheme will need to be chosen and for limited companies, a corporation tax is the right payment process.
There are also organisations such as clubs or friendly societies. These will also need to find out which taxes they need to pay. However, the likelihood is that they will also need to pay corporation taxes.
If the company is a limited company, a profit and loss account, balance sheet and any additional information should be made in compliance of the provisions of Schedule 4. If there is a good reason to include the accounts in a form that does not comply with the provisions of the said Schedule 4, the company will also have to specify a reason for doing the same.
As anyone can see there are lots of things that need to be considered while paying taxes for your business and the above mentioned factors are only a few of them. For example, you may qualify for a total audit exemption if your annual turnover and balance sheet is lower than a certain amount and you qualify as a small company.
Simply said, for a business owner, paying the right taxes and finding out whether the company qualifies for any tax exemption can be a tough task indeed. Taking care of which papers to send and to make accounts in the specified form according to the provisions of the right section can further add to the worries of any business owner.
If you have a running business, there are accountants that can help make things easier for you. Indeed, it is quite important since any mistake in making and submitting your accounts in the right form and by the specified date can land you in trouble with the tax authorities jeopardising your business.