Money matters are confusing. Here is a useful guide which may help you.
There could be many reasons, but the main one is usually tax. If you are self employed, a company director, or have untaxed income you will need to file a tax return with H.M. Revenue & Customs, and pay any tax due.
The tax laws are complex, and you may need accounts prepared to show your taxable profit. Whilst you may be able to deal with this yourself, for people who are self employed it is usually safer and less stressful to use a professional accountant.
Registration for VAT is compulsory if your annual turnover exceeds £81,000 or you expect the turnover to be higher than that amount in the next 30 days.
If you think your turnover may be close to the threshold, you can keep a 12 month running turnover total in case it does go over the threshold.
You can also register voluntarily. Note that you cannot register for VAT if you sell only goods or services that are exempt from VAT or you are not in business according to the HMRC’s definition.
CIS stands for the Construction Industry Scheme. CIS regulates the procedures of making payments to subcontractors by contractors in the construction industry. However, businesses outside the industry which involve in construction in the way that they spend much of their funds on construction may also fall under CIS.
A Company Tax Return is a document which is filed for each accounting period by companies liable for Corporation Tax. It is also known as a Corporation Tax Return. A company has to file a return each year, even if it has not made any profit.
Capital Gains Tax is a tax you pay when you make a profit by way of selling assets (e.g. shares or property). Each individual has a tax fee allowance, below which no CGT is due. Currently that stands at £11,100. (Tax Year 2015/16). There may also be other allowances available.
In most cases you do not have to manage your finances on your own. You may authorise an accountant to act for you. You can avoid many misunderstandings or mistakes if you authorise an accountant to do it for you.
HMRC requires a special form for this purpose - a 64/8. Your accountant can also request authorisation online, after which you will receive a coded to give to him. You can find the form here.
Note that you are still responsible for your own tax affairs at all times.
Real Time Information, or RTI, is a new system that HMRC is introducing to improve the operation of PAYE. RTI will mean that PAYE information is collected every time an employee is paid rather than annually when a business submits its end-of-year tax return. There are potential penalties for non-compliance.
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