The UK remains to be one of the economic powerhouses in the world, and doing business here is a privilege. As a business owner, you are closer to a diverse market and have easy access to raw materials and suppliers, which makes your business more competitive. Being an owner, however, also entails responsibilities, including paying taxes.
Here are three things you may not know about business taxes:
1. Doing Business at Home
When it comes to taxes for businesses run at home, it can be good or bad. The great thing is you can reduce your taxable income with items related to doing business such as electricity or extra telephone bill, but on the downside, you cannot claim those that you use for private and business. These include Internet connections and rent.
2. Business Tax Loans
Business taxes can amount to thousands, which can potentially hurt the cash flow of any small business. When you need to settle it right away, you can try an application for business tax loans. Although the loan still needs to be repaid, you can now spread the payments over several months, allowing you to use a portion of your income to other important business functions like marketing.
3. Capital Gains Tax
There are many expenses you can claim to reduce the taxable income, provided you incurred them while doing business. Nevertheless, the law sets some limits and conditions, including a potential capital gains tax. Also known as CGT, you need to pay this if you convert one of your rooms into a home office and you decide to sell the property.
Taxes are a given, but since they don’t add to the cash flow and profit (unless you’re entitled to a refund), business owners need to be more efficient and smart about it. It always begins by getting to know more about the conditions, including allowable deductions.