When starting a new business you may feel overwhelmed by the amount of different taxes that you need to be aware of, report on and pay.
Table Of Contents
The following is a brief introduction to the various types of small business tax that you will encounter and need to have a working knowledge of.
VAT – Value Added Tax
For most businesses it is compulsory to register for VAT if the turnover of the business is more than the VAT threshold (currently £77,000). However, there are some exemptions to this, for example health providers, insurance providers, rental of domestic property. We recommend that you check with HMRC or your accountant to check the specific HMRC VAT guidance for your sector.
Businesses can voluntarily register for VAT if they are under the threshold, as there may be some advantages to doing so in specific circumstances. For example; when a business starts up it may have a large amount of purchases which incur VAT, by registering for VAT the business can reclaim the VAT on the purchases.