If you are unsure about how to file your tax return or if you need help with corporation tax, it is important that you keep track of all your taxes. It can be costly if something goes wrong.

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What business taxes are you required to pay?

The type of business tax you will be required to pay is determined by a variety of factors.

• How your business is organised
• How much profit can you expect to make?
• How you pay yourself (whether it’s a salary, dividends, business drawings)

You will not be required to pay all of them. It is still important to understand the UK’s business tax system, because it can help you run and structure your company. For advice from Tewkesbury Accountants, contact Randall & Payne, a leading firm of Tewkesbury Accountants.

The main taxes that businesses need to pay are:

• Corporation tax
• Income tax
• National Insurance
• VAT
• Business rates
• Dividends tax
• Capital gains tax

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Corporation tax

You will have to pay corporation taxes if your business is structured in a limited liability company. If you are a non-UK company, a club or co-operative, or an unincorporated association, then you will need to pay corporation taxes.

The corporation tax is payable annually on all profits that your business has made during the financial year. It includes not only trading profits, but also profits made by your business on selling assets and investing.

Your profit determines the corporation tax rate that you pay. The corporation tax rate for the 2024/25 year is as follows:

• Profits below £50,000: you are charged 19% at the small profit rate.
• If you earn more than £250,000, you will be charged 25%.
• Profits of between £50,000 and £250,000:You will be charged the main rate of 25%, but you can reduce your effective rate by using Marginal Relief. Marginal relief can be calculated at gov.uk.

Your profits are not automatically deducted from corporation tax. You won’t receive a bill by post. To pay corporation tax you must complete the following steps.

1. Register for Corporation Tax. This is required when you first start your business or restart an old one. The majority of businesses register with Companies House at the same time. You will need to register your Government Gateway ID and password in order to log into your tax account for your business, along with your Unique Taxpayer Referral (UTR).
2. Maintain your accounting records. You or your accountant is responsible for maintaining your accounting records. These records will be used to prepare your company’s tax return.