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Tax Advice Assignment - Essay Example
Finance & Accounting
Pages 7 (1757 words)
TAX ADVICE Taxation is one aspect of business which is a liability of a company to pay the government an amount based on the business turnover. This provides them permission to run their business in the home country or elsewhere and get necessary support from the authorities…
Retaining GBP 30,000 per year in business Moving on to the first aspect, what are the major tax codes implied by the UK government. As with usual government practices across the globe, here too there is a (1) Corporation tax, (2) VAT, (3) PAYE (Pay As You Earn), (4) Self Assessment Tax, (5) Business rates tax, (6) Capital Gains Tax, (7) Stamp and Excise duties and (8) Industry specific tax. Before getting into these taxes, we need to understand the records to be maintained for an ongoing business concern or a proprietorship concern for that matter getting converted to a company format. These include: Business income records (record of sales) Business expenditure records (record of purchases and expenses) Financial and accounting records Employer records (payment to employees, benefits, IT , NIC) VAT records Formation of a company has major benefits in terms of liability of partners or shareholders as the business is treated as separate entity and hence there is no personal liability of any partner / shareholder towards creditors of the company. Corporate profits will be taxed at corporate tax rate of 28% and HM Revenue and Customs (HMRC) is responsible for Corporation Tax aspects. Upon intimation to Companies House, the same shall be provided to HMRC who in turn provides an introductory pack within six weeks containing CT 41G forms. ...