Category: small business

When and how to incorporate

Over the last decade, corporation tax rates for most companies – irrespective of size – have fluctuated between 19% and 21%. The main rate of corporation tax is expected to be cut to 17% from April 2020. Current corporation tax rates are still pretty favourable and are indeed generally lower than those paid by many…


Director’s salary or bonus?

Given current tax rates, paying a dividend rather than a salary will often be a more cost-effective way of withdrawing profits from a company. Tax is currently payable on any dividend income received over the £2,000 annual dividend allowance at the following rates: 7.5% on dividend income within the basic rate band (up to £37,500…


VAT registration – sooner or later?

Once a business is up and running, the next major administrative area to be faced often concerns the subject of VAT. At first glance, it looks complicated – not to mention time-consuming – particularly for small businesses. However, taken one step at a time, the rules governing VAT registration and invoicing are generally quite straight-forward…


Payroll – how to deal with new starters

From a payroll perspective, there are various tasks that an employer has to perform when they take on a new starter. For 2019/20 an employer needs to operate PAYE where the employee earns more than £118 per week (the lower earnings limit for National Insurance purposes). However, if any employees earn more than £118 per…


FreeAgent Expert Practitioner

This morning (Tuesday 9th July 2019), I decided to take a day trip from our sunny office in Bishop’s Stortford to The Hilton Garden Inn, Luton North in order to enhance my FreeAgent skills and functionality at the FreeAgent masterclass. When I arrived after my one hour fifteen minute journey, I was greeted by the…


A guide to using simplified expenses for small businesses

Certain unincorporated small businesses may choose to use the ‘cash basis’ when calculating taxable income, under which participants are taxed on the basis of the cash that passes through their books, rather than being asked to undertake complex and time-consuming calculations designed for big businesses. Whilst easing the administrative burdens of preparing ‘traditional’ accounts, using…