General Business Tax

IR35 Personal Service Companies IR35 was brought in to prevent the payment of less tax and national insurance by using a personal service company or partnership to provide services through rather than being a direct employee.

For example, by using a personal service company it has been possible to extract income from the company in the form of dividends rather than salary so saving substantial amounts of national insurance.

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Limited Liability Partnerships (LLP) A Limited Liability Partnership (LLP) is a new form of legal entity introduced on 6th April 2001 and is neither a company nor a partnership. It has its own legal personality just like a limited company and has unlimited legal capacity, e.g. to own property, employ staff, sue and be sued, create floating charges and join in other business enterprises such as being a partner in a partnership.

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Main Tax Late Filing and Payment Penalties As a small business owner you will have to deal with a number of different departments within HMRC. Each department has different forms to complete with different deadlines and different penalties should either your submission or payment be late. The following is a quick guide as to what you need to be aware of when dealing with HMRC and which deadlines you should put in your diary.

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National Insurance - Your Way Around the Maze A review of all the different types of national insurance that affect employees, employers, the self-employed and those that just pay it voluntarily.

  • NIC for Employees
  • NICs for Employers
  • NIC Holiday
  • Employment Allowance
  • Self Employment NIC
  • Voluntary National Insurance
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The Construction Industry Scheme The definition of construction activities is widely drawn and so most businesses working in construction will be caught by CIS. It applies to sole traders, partnerships and Limited Companies but not to private householders who are paying contractors. Contractors are businesses that carry out "construction operations" as part of their business and subcontractors are those who carry out such work for the contractor, but it does not include employees of the contractor. Some businesses will be both a contractor and a subcontractor.

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The Tax Advantages of Self-Employment When you decide to work for yourself you need to choose which form your business will take. The most common forms of business are:

  • Sole-trader - you run the business on your own, usually under your own name;
  • Partnership - you and one or more other people jointly run the business;
  • Limited liability partnership - a special type of partnership that gives you and the other business owners more protection from creditors;
  • Limited company - an organisation that you own and control, which carries out the business on your behalf.
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