Knowing what taxes to register for, and when, can be confusing – not in the least as most taxes need separate registration. Here’s a handy guide:
Business Taxes on Profit
- Sole Traders – register with HMRC for Self Assessment. No later than 5 October after end of tax year when you first get Self Employed income. Exception – if your turnover (not your profit) is less than £1,000 – you then do not need to register, but check for registration next tax year.
- Partnerships – register with HMRC for Partnership Self Assessment and the partners for Self Assessment. Time limits as above.
- Companies – register with HMRC for Corporation Tax. Although not a legal requirement, in most cases Directors and Shareholders will need to register for Self Assessment as well. Time limit 3 months after starting to trade.
- Generally there are no separate registrations for National Insurance.
- Self employed pay classes 2 and 4 NI via Self Assessment – its calculated automatically.
- Employees, including company directors, pay class 1 NI via payroll.
- If you intend to trade via a limited company then you need to register with Companies House to create your company, before you start trading.
- Companies also have to file at Companies House (1) an annual Confirmation Statement around the anniversary of incorporation, and (2) business accounts 9 months after the end of the financial year.
- These requirements do not apply to Sole Traders and Partnerships.
Registering your Business Name
- There are no requirements to register a business name, and no official business name registry exists in the UK any more, other than companies registering with Companies House as above. If you receive a “notice” to register a business name, likely or not its a scam.
- Don’t forget to register your domains though.
Employers (including Companies for Directors)
- If you employ staff – which for a company includes directors – then you need to register as an employer with HMRC before the first payday and operate payroll/PAYE
- You probably need to register with Pensions Regulator and offer a workplace pension as well
Value Added Tax
- If your business turnover goes over £85,000 then you need to register for VAT. Note the £85,000 measure is on a rolling monthly basis, not an annual check.
- If you are not otherwise VAT registered but make sales of digital products to the EU over £8,818 the you need to register for the EU VAT Mini One Stop Shop (MOSS). Note this will change with Brexit.
- Most business will need to register with the Information Commissioners Office. In some cases exemptions may apply.
These are the common taxes – less common ones apply in all sorts of specialist sectors. Speak to us if anything crops up which you don’t recognise.
Business trading outside of the UK will need to consider registration requirements in the other countries they trade in – that may be a more significant issue after Brexit.
For a simple sole trader / partnership, registration for Self Assessment with HMRC and registration with ICO for Data Protection is probably all that’s needed. For Companies and more complex businesses there are multiple registration requirements, as above.