Navigating taxes as a business owner can feel overwhelming. Whether you’re a sole trader or running a limited company, understanding your tax obligations is crucial to staying compliant and maximising profits. To make things easier, we’ve compiled a list of the most frequently searched tax questions by business owners in the UK.

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General Tax Questions for Business Owners

1. What taxes do small businesses pay in the UK?
Small businesses in the UK may pay several types of taxes depending on their structure, industry, and turnover:

• Corporation Tax
• National Insurance
• Value Added Tax (VAT)
• Business Rates
• Employer taxes (PAYE, NICs, Apprenticeship Levy)
• Capital Gains Tax
• Income Tax (for sole traders or partnerships)

2. How do I register my business for tax purposes?

• Sole traders must register as self-employed with HMRC.
• Limited companies must register with Companies House and HMRC.
• VAT registration is required if turnover exceeds the VAT threshold.
• PAYE registration is needed if you employ staff.

3. What is the deadline for submitting my Self Assessment tax return?
The deadline is 31 January following the end of the tax year (5 April). Filing online gives you more time but ensure you don’t miss the deadline to avoid penalties.

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Deductions and Allowances

4. What business expenses can I claim as a sole trader?
Sole traders can claim a variety of expenses, including:

• Office supplies and equipment
• Travel and vehicle costs
• Home office expenses
• Professional fees and subscriptions
• Marketing and advertising
• Training and development

5. Can I claim a home office deduction?
Yes. If you use part of your home exclusively for work, you can claim a proportion of rent, utilities, and internet costs.

6. What are simplified expenses for small businesses?
Simplified expenses allow small business owners to use flat rates for certain costs, like vehicle mileage or home working, instead of calculating actual expenses. Check Gov.uk for a detailed calculator.

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Tax Rates and Allowances

7. What is the current Corporation Tax rate?

• 19% for profits under £50,000
• 25% for profits over £250,000
• Marginal relief applies to profits between £50,000 and £250,000

8. What is the VAT registration threshold?
If your taxable turnover exceeds £85,000, you must register for VAT.

9. What is the Capital Gains Tax allowance?
The annual exempt amount is £3,000, with gains above this taxed at 18% for basic rate taxpayers and 24% for higher rate taxpayers.

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Filing and Payments

10. When are tax payments due?

• Self Assessment: 31 January following the tax year
• Corporation Tax: nine months and one day after the end of your accounting period

11. What records do I need to keep for tax purposes?
Keep all income and expense records, including invoices, receipts, and bank statements, for at least six years.

12. Can I pay my taxes in installments?
Yes. HMRC offers payment plans for Self Assessment and Corporation Tax if you cannot pay the full amount at once.

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Final Thoughts

Taxes don’t have to be complicated. By understanding common tax questions and keeping accurate records, you can save money, stay compliant, and focus on growing your business. Whether you’re a new entrepreneur or a seasoned business owner, staying informed is your best strategy.