This Content Was Last Updated on November 5, 2015 by Jessica Garbett


A query received:

“I just started a limited company in March 09. I wonder when I need to pay tax. “

And our reply:

“Regarding your query on when taxes are due: there are a lot of whats, ifs and maybes but, broadly:

“Corporation Tax – due 9 months after end of financial year. Charged on profits, which in turn are business income, less business expenses NOT including dividends

PAYE/NI – due on staff salaries (including directors) – payable monthly, quarterly or, exceptionally, annually, dependant on amounts

“VAT – due quarterly if your business income exceeds the registration threshold.

“In addition you have to file accounts at Companies House by 9 months after the year end, this is separate to your tax obligations.

“For a small business you will need to give early thought to paying yourself – the choices are salary, which is chargeable to PAYE/NI or Dividend which is a post tax appropriation of profit. The two are broadly tax neutral, but salaries incur NI.”