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VAT and tax

Understanding what your tax and VAT obligations are can be difficult for a new business. So we've listed some useful ways that you can learn more about this.

Know your tax obligations

Register for tax self-assessment on the government's website:

HMRC can also offer business self-employment start-up information:

For the range of taxes that maybe applicable for a start-up business:

There is also a self-assessment ready reckoner available to help customers budget for their first tax bill and tax help fact sheets, which are a good source of straightforward guidance that you can download.

E-learning:

HMRC have some fantastic e-learning products. Access the links here to the most popular titles:

They contain everything you need to know about being self-employed and employing someone. You can work through this at your own pace and dip in and out to suit your own needs. Thousands of businesses have already used these and found they are a great way of learning. Why not give it a try now?

Webinars

HMRC run a wide variety of webinars (online presentations) that can help you to get things right from the start. Webinars last less than an hour and you can either choose between a pre-recorded webinar available at any time, and a live and interactive webinar where you also get the opportunity to ask questions.

Record keeping mobile apps

There are a range of smart phone record keeping apps supplied by third parties to help you run your business.

Tax help fact sheets

Have a look at HMRC’s Tax help fact sheets. They cover a range of subjects such as self-assessment, expenses, and allowances for the self-employed, employing someone for the first time, VAT, and limited companies.

HMRC on YouTube

If you are looking for bite-sized chunks of information on a range of tax matters, why not access HMRC’s YouTube channel. There are numerous YouTube clips to help you; some lasting for less than one minute.

Entrepreneurs tax relief

This is also known as business asset disposal relief. It’s a scheme that allows start-up companies to pay less Capital gains tax (CGT) when they sell (or ‘dispose of’) all or part of their business. This means you will only pay 14% in April 2025 and then 18% in April 2026 10% CGT. To qualify for this relief, both of the following must apply for at least 2 years up to the date that you sell your business:

Capital Gains Tax

This is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. In October 2024 budget announcement the higher rate of Capital Gains Tax will rise from 20% to 24%. The lower rate will increase from 10% to 18%.

Corporation Tax

This a tax your company or association pays to HM Revenue and Customs (HMRC) on profits in an ‘accounting period’. The amount you pay depends on how much profit you make. In October 2024 budget the Government confirmed that the Annual Investment Allowance will remain in place up to £1 million, as will the Small Profits Rate for Corporation Tax. You can see the latest rates on the government's website.

Useful Apps:

The business support tax app allows access to all the above products via your tablet or mobile device.

It is available on:

Last updated: 4 November 2024