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TonyTax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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As a small ltd company with profits of £40,000 per annum what

Resolved Question:

As a small ltd company with profits of £40,000 per annum what types of tax do I pay
I understand I only pay corporate tax of 20% of my profit
Is this correct as my business partners are saying that there is an additional business tax to pay and believe that they are trying to be dis honest regarding what tax is payable
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi. Let me take a look at this and I'll get back to you in a bit.
Expert:  TonyTax replied 1 year ago.
Hi again.
A limited company pays corporation tax on its profits at 20% on profits up to £300,000. Take a look at the link below for more information. The rate will reduce over the next few years, first 19% and then to 18%.
https://www.gov.uk/corporation-tax-rates/rates
If the company is VAT registered it will charge VAT on its goods and services depending on what they are and will pay VAT on its supplies depending on what they are. The VAT the company pays is offset against what it collects and the difference is either paid over to HMRC if the VAT it collects is more than it pays or paid back to the company if it pays more VAT than it collects. In net terms, the company should pay no VAT.
If the company pays salaries, it may incur Class 1 employer national insurance contribution liabilities. Read about that at the link below:
https://www.gov.uk/national-insurance-rates-letters/contribution-rates
I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thanks TonyTaxI am currently not vat registered so can I clarify that the only tax payable is corporate tax at 20% of my net profit
Expert:  TonyTax replied 1 year ago.
That's correct.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15886
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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