What Starting a Business Means Regarding the Taxes

income-tax-in-portugalEveryone needs to pay taxes and it’s considered a civic duty to do so – you keep yourself within the limits of the law and you also help the state’s economy. It may be hard for some people to understand this concept, but it’s the taxes that keep everything going in the right direction with everything that you get for free in a country – the public services, the social help and the financial help that social services offer for those in need.

This being said, for those who want to open up a business in the UK, they really need to consider more aspects at once. First of all, starting this kind of activity needs to have a solid financial support, at least in the beginning, until the business starts producing income and enough money for everything you need.

There are certain steps that you have to take, but the legal aspects are extremely important. Let’s see what is needed to get everything right from the first time.

The Beginning

First of all, everything starts out with an idea – what you want to do. There are different types of activities or services that you can offer, and you need to consider what you know bet. You can be a great hair-dresser and you should concentrate on this, if that’s what you know how to do. The next step should be to get the right type of funding – there are different ways to get the money that you need, and if you don’t have enough in your bank account, you could always get a specific loan – if you have the right business plan and if everything is made according to the legislation.


Setting Up the Business

This is where the fun part actually begins – you will need to decide on the legal structure that is adequate for your business, and this needs to be done before you start trading and registering for tax. These are mandatory requirements, and no business can start working without these steps.

120517_calculatorIn order to find out exactly what you need to do, you can call the tax office number from HMRC and they will give you all the information on the steps you’ll have to follow. There are different types of business, like a limited company, a sole trader, a business partnership, but you can also choose an unincorporated association, if you go for a small organization without profit, or a social enterprise, if you think about having a business for helping communities or people.

However, when you choose one of these forms of business, you’ll have to consider carefully the risks and benefits for each of these types – the financial risk, what takes you’ll have to pay and the control you will have over your business.

Employment and Responsibilities

Talking about taxes brings us to the next topic – what you have to when you decide to employ someone. Some businesses can’t be run with only one person doing all the work – you are the boss after all, and you might get to the point where you’ll need help in managing everything.

When you decide to get someone to help you out, there are certain rules that you’ll have to respect in employing the staff that you need, and one of these rules says that you have to register with HMRC if you become an employer. When you decide the payment, you need to know that it can’t be less than the national minimum wage, and you’ll also need employment insurance.

And even if you work alone for your business, there are still different taxes that you’ll have to pay like the insurance for the business and the license for operating.

Dollarphotoclub_83240124 (1)Even if all this information might seem a little bit too much for a beginner, a specialized attorney will be able to help you out with everything that is needed for making sure that you operate legally and that all the aspects of your business are within the law, including the taxes and other legal requirements.


Taxes You Have to Pay and Other Legal Requirements

tax1Everyone has to pay taxes, because it’s proven that it’s the only way for the economy of the state to increase and flourish. However, people don’t always realize that it’s benefit for them and for the rest of society.

There are special departments that make sure of this, and they make their job pretty well, actually. For UK, there is the HMRC, an abbreviation for HM Revenue & Customs,  the UK’s payments, tax and customs authority.


Being the responsible department with taxes, they are always looking for better ways to improve this service, so that people could understand better the need for taxes. First of all, everything that is collected is directed for paying for the public services – those that are offered for free, and for helping the families and the individuals in need of financial support. The social services are in check with this, and they use the money for offering the needed help.

It’s important to have a department that is impartial and effective in offering these services, as it’s a great help for the administration, both local and national. The main reason of existence is that they need to help people pay the right taxes and also making it hard for those who want to cheat the operating system.


What Taxes You Pay

There are plenty of taxes, but let’s see what are the most common of them, the ones that people might know more about. First of all, there is the income tax – everyone who earns a salary pays this, and it’s mainly the responsibility of the employer to take all the necessary measures for this money to be delivered to the national budget. Of course, those who have a business will also pay a certain tax, taking different names and in different amounts, depending on the total amount.

Income-tax-own-picAmong all those taxes that people pay, the HMRC is responsible for customs duty, trade statistics, tax credits, national insurance, VAT and import VAT, environmental taxes, land and petroleum revenue taxes, inheritance tax, capital gains tax, corporation tax, insurance premium tax, climate change tax, and of course the income tax.

Tax Evasion

For those who don’t pay their taxes in time or for those that chose to take less legal routes to counterfeit the accountability papers and declare lower incomes, they can face the charges of tax evasion. This is a considered a felony in any state of the world, because the more people are trying to cheat the system, the more money the state loses by not taking what is due from them.

There are different ways to make sure that the taxes are paid, and there are always organized check-up for those companies that are suspected of tax evasion. Even if people consider that it might be easy to cheat the system, no matter how good they try, there will always be traces of their felony – the money are always registered in one account or another, and not even a good accountant can cover for major crimes like this one.

Knowing What You Have to Pay

As it usually happens, when you start a business, you will have to pay certain taxes. The best thing to do is to get a lawyer or an accountant, as they know exactly what it needs to be done for keeping the business operating legally.

Molson-Coors-rebuts-withering-UK-tax-attack-over-alleged-108m-dodgeFor finding out for yourself what the amounts of money are or what obligations you might have for paying taxes, you can call the tax office number and they will give you all the details in your particular situation. It’s better to know beforehand, as different businesses have different taxes that need to be paid at different periods of time.