- Corporation tax – Companies incorporated in the UK are liable to corporation tax. It is charged on the company’s profits and gains in an accounting period. The directors of the company need to ensure that they inform HMRC that they exist and that they are trading meaning that they are liable to tax. The directors must also calculate their own liabilities, pay the amount due by the deadline and file a company tax return.
- Value Added tax (VAT) – The company must register with HMRC for VAT if it has supplied taxable goods and services amounting to more than the registration threshold in the last twelve months or expects to supply taxable goods and services amounting to more than the registration threshold in the next 30 days. The VAT registration threshold is currently £81,000.
- Income tax – Companies with employees are responsible for calculating and paying appropriate income tax and National Insurance contributions for them. The director has to register as an employee through PAYE (Pay As You Earn) registration, which is used to collect the taxes.
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A tax advisor is a financial expert with advanced training and knowledge of tax law. The main responsibility of a tax advisor is to minimise taxation while remaining compliant with the law. A company has to consider a number of practical and legal tax matters once it has been incorporated. Tax accountants and advisors are important to ensure that all of these practical and legal tax matters are performed and taken care of efficiently. The different types of taxes in UK are:
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