Key taxes you should pay when running a small business

Running a small business can be more overwhelming that running a big company in present times, because there are different aspects, which have to be considered, for not experiencing financial or legal issues. Moreover, because you are the manager of a small business, you do not afford to hire professionals to handle all these issues, so you have to take your time and do it by yourself. So, if you are having a company in EU, or if your main customers are from this area, then you should know some details about the taxes you would have to pay and about the EU VAT. You have to be sure that you keep your business in good books when it comes to takes, because it is crucial for every company to meet the legal requirements and to have a clear situation when it comes to cash flow. Here are the main taxes you would have to pay as a small business, so make sure you are aware of them.

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VAT – what is to know about it?

VAT is seen as a consumption tax that is asked for the services and goods offered in the European Union. This tax is applied to all the services and goods that are purchased by clients from the EU countries, so if your business does not provide services or goods that are bought by non-EU countries, you would not have to pay it. But if your company is producing services and goods for the EU customers, and you make VAT sales of more than £82,000 a year, you would have to register your company for VAT. Depending on certain circumstances, the value of the VAT might be of 0%, 5% or 20%.

Income tax – essential details

If you are running a small company you would have to pay income tax on the profit your business does. In case you have a day-to-day job, you would pay income tax for your small business when the profit of the company would go over the personal allowance. In case you have under 75 years old, this income would be of £10,600. The amount of money you would pay as income tax, would depend on the income you take, so make sure you fully understand the rules of your country.

Do not forget about the national insurance

The National Insurance is not considered strictly a tax, but you have to pay the money to the government, because either way you would experience legal issues in the future. As an owner of a small business, you would have to pay two kinds of national insurance, depending on the type of profit you would benefit of. Make sure you find out the required details about this insurance. If you are in doubt on what other taxes you have to pay, and what is the exactly sum you would have to pay for every one of them, then you should consult a specialist in this domain. In addition, there are plenty of details online, so you can read one of the articles written by experts.