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Tax Education

It’s time for school. We will teach you all you need to know about tax. Here you will find easy-to-understand blogs, bitesize information and facts about tax. No talking at the back!

What do you know about tax as a business?

If it isn't much, you're in the right place. From profits to losses and any allowable expenses in between, we’re here to simplify business tax.

Can you name the three main UK taxes?

Income Tax, National Insurance Contributions (NICs) and VAT (Value Added Tax). We’ll explain the key points you need to know about each of them.

Can you answer my tax related questions?

If you run a business in the UK, then yes! Take a look at the most frequently asked questions below, find a blog, or send us a message.

FAQs

Tax Education

Do I need to pay tax on my side hustle?

Maybe! The Trading Allowance means you can earn up to £1,000 in a tax year from self-employment or property, and you won't need to pay tax on it, or even report it to HMRC. Just make sure that you keep good records to help you monitor your earnings. Learn more about the Trading Allowance.

Can I have more than one sole trader business?

Absolutely - just make sure you get enough sleep at night! Sole traders aren't legally separate from their business, so you won't need to register them all separately. List each business on your Self Assessment tax return with a separate section for each one. Find out more.

If I claim VAT back on pre-registration expenses, will I also pay VAT on invoices paid to me in the same period?

You may be able to claim back VAT you paid before registering (up to a point!). But you can't charge VAT on invoices until you register, so you won’t collect any VAT to pay on to HMRC. Just make sure you register in plenty of time.

If a company is owned 50/50, is it possible for one person to take dividends and the other to choose not to?

Yes, it is. Companies can issue different types of shares to help them be more flexible. For example, two shareholders could own the company equally, but only one is entitled to receive dividend payments or receives them at a lower rate.

I recently started earning money from creating digital content. How much can I earn before I pay tax and how do I claim expenses?

The Trading Allowance means you can earn up to £1,000 from self-employment in a tax year before you need to report it to HMRC, register as self-employed, or pay tax on it. If you do need to register then you can include your total expenses on your tax return. This amount will be deducted from your income, so you'll only pay tax on the profits. What type of tax return you need to submit depends on what sort of business structure you choose!

Learn more about choosing a business structure.

I'm a company director and planning to have a baby. What salary should I pay myself so I'm eligible for maternity pay?

As a director you’re actually entitled to Statutory Maternity Pay (SMP) just like any other employee - as long as you meet the eligibility criteria. If you’re not eligible for SMP, you could instead claim Maternity Allowance.

Learn more about maternity pay for self-employed people.

Articles

Show All Tax Education

UK Tax Rates, Thresholds and Allowances for the Self-Employed

6th December 2024

Read our guide to UK tax rates and thresholds for sole traders, limited companies, partners and partnerships, employers, and other businesses. UK…

What’s the Most Tax Efficient Director’s Salary?

8th November 2024

As a director you’re legally separate from your limited company even if you’re also the owner. This means you’re not allowed to…

The Employment Allowance and Employer’s National Insurance Contributions

30th October 2024

The Employment Allowance is a type of relief available to some employers to help reduce the cost of their National Insurance contributions…

Schools Need to Teach Children About Tax, Say Britain’s Entrepreneurs

4th September 2024

Ask any business owner what it’s like to be self-employed, and they’re likely to give you some version of it being both…

Accountancy Terms Explained for Startups

17th April 2024

Starting a business can be complicated enough, especially with all the new lingo that crops up along the way. In this article…

Does a Sole Trader Need to Register with Companies House?

15th March 2024

There’s a lot to think about when setting up a business, whether you’re a sole trader or opening a limited company. As a…

Looking for help with tax for your business?

We want to demystify tax for businesses, owners, and casual side-hustle dabblers, by providing easy-to-understand guidance.

It all started when news reports and social media posts started using the phrase ‘side hustle tax’ to describe the new digital platform reporting rules. It led to months of confusion and panic.

But, guess what? There is no ‘side hustle tax’.

We helped journalists from major news sites explain what was happening and clear up the confusion, so now we’re on a mission to teach everyone about tax.

Do you have a tax question?

Let us help! Our online blogs and guides include a huge range of tax and business related topics, or you’re more than welcome to send us your questions. Tap the button below, and put ‘Tax Education’ as the subject line.

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Tax Education