Accounting FAQs
Common Questions and Answers that associated with Tax & Accounting in UK.
How much is VAT in the UK?
The standard VAT rate in the UK is currently set at 20%. Certain items may qualify for reduced or zero rates, such as children’s clothing and certain food products.
What is the VAT registration threshold?
You must get register for VAT if your taxable turnover exceeds from £90,000 in any consecutive 12-month (365 days) period.
What is the accounting period in the UK?
An accounting period is a specific timeframe used for financial reporting. Typically, these periods last for 12 months, and different businesses may have varying accounting periods. When you establish a new company with Companies House, your accounting period is often determined at that time. The end of this period is referred to as the “year end,” which usually falls at the end of the month one year after your incorporation. This date dictates when your company accounts and confirmation statement are due.
What expenses can I claim through my accounts?
The expenses you can claim depend on your business type, but common categories include:
- Business travel
- Office supplies and equipment
- Communication costs (phone and internet)
- Rent and utilities
- Professional services (like accounting)
- Employee expenses
- Vehicle costs
- Uniforms and work attire
- Marketing and advertising expenses
How should I store my receipts electronically?
To manage receipts efficiently, save them in a secure cloud service such as Google Drive or Dropbox. This allows easy access from any device and protects against data loss. For physical receipts, consider scanning or photographing them, and using bookkeeping software can also help manage records effectively.
What is a UTR number?
A UTR (Unique Taxpayer Reference) number is a 10-digit identifier issued when you register for self-assessment or establish a limited company. It’s essential for tax-related processes.
What happens if I pay CIS late?
Late payments for CIS can result in a fixed penalty of £100, which can escalate significantly for more severe delays.
How do I pay my self-assessment tax bill?
You can pay your self-assessment tax bill using several methods, including direct debit, online banking, debit or credit cards, and through physical banks or building societies.
What are the accounting deadlines for self-assessment?
Key deadlines for self-assessment include:
- 31st January: Payment and online submission for the previous tax year’s self-assessment tax return.
- 5th April: Last day of the current tax year.
- 6th April: Start of the new tax year, with adjustments to tax thresholds and allowances.
- 31st July: Due date for the second payment on account for the previous tax year.
- 31st October: Deadline for submitting the previous tax year’s self-assessment tax return by paper.
How much is corporation tax?
Corporation tax rates vary based on company profits:
- Small profits rate (profits under £50,000): 19%
- Main rate (profits over £250,000): 25%
- Marginal relief applies between these profit thresholds.
What is the best way to do bookkeeping?
Keeping meticulous records of all transactions is crucial. Utilizing bookkeeping software such as Xero, FreeAgent, Sage, or QuickBooks can greatly simplify this process.
When is the CIS submission deadline?
Monthly returns for the Construction Industry Scheme (CIS) must be submitted to HMRC by the 19th of each month for the preceding tax month.
How often must my company file a confirmation statement?
Every company is required to submit a confirmation statement at least once every 12 months.
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