UK tax self-assessment, VAT (Value Added Tax), corporation tax, PAYE and national insurance, business rates, customs duties, capital gains tax, stamp duty land tax, and inheritance tax are some of the key types of taxes that businesses and individuals may be required to pay in the UK. Here’s a brief overview of the key differences between them:

• UK Tax Self-Assessment: This is a system used by individuals, sole traders, and certain entities, such as partnerships, to report their income, expenses, and other relevant information to HM Revenue & Customs (HMRC) for the purpose of calculating and paying their taxes. Taxpayers are responsible for calculating their own tax liability and submitting an annual tax return to HMRC. The self-assessment system applies to various types of taxes, including income tax, capital gains tax, and national insurance contributions, among others.

• VAT (Value Added Tax): VAT is a consumption tax that is levied on the sale of goods and services in the UK. It is a transaction-based tax and is collected by businesses on behalf of HMRC. Businesses that are registered for VAT charge VAT on their sales, and they can generally reclaim VAT on their purchases, subject to certain rules and limitations. VAT is typically paid quarterly, depending on the size and turnover of the business.

• Corporation Tax: Corporation tax is a tax on the profits of limited companies, including public and private limited companies, and other corporate entities. Corporation tax is paid to HMRC in line with the accounting reporting period and is typically calculated based on the company's profit which is then subject to adjustments for disallowable expenses and additional reliefs.

• PAYE and National Insurance: PAYE and national insurance (NIC) are generally deducted from and employees pay during the payroll process. The rate of PAYE and national insurance is set based on individuals circumstances which HMRC will advice employers what rate should apply. National insurance also affects the employer, as well as self-employed individuals.

• Business Rates: Business rates, also known as non-domestic rates, are a type of tax levied on non-domestic properties in the UK, such as commercial properties, offices, shops, and warehouses. The amount of business rates payable depends on the rateable value of the property, which is assessed by the local council, and the applicable business rates multiplier set by the government.

• Import/Export Customs Duties: Customs duties may be applicable when importing or exporting goods to and from the UK. These duties are imposed by the UK government on certain goods that are imported into or exported out of the country and are based on the value, quantity, or weight of the goods, as well as their classification which assigns a specific code to each type of goods.

• Construction Industry Scheme (CIS): CIS is a tax scheme in the UK construction industry that requires contractors to deduct a percentage of payments made to subcontractors and remit to HMRC as advance tax on their behalf. Subcontractors, on the other hand, may receive payments net of the CIS deduction, which is treated as an advance payment towards their income tax and National Insurance (NI) liabilities.

• Capital Gains Tax: Capital gains tax is a tax on the profits made from the sale of certain assets, such as property, stocks, and other investments, which have increased in value. Individuals, partnerships, and companies may be liable to pay capital gains tax on the gains made from the disposal of these assets, subject to various exemptions, reliefs, and allowances.

• Inheritance Tax: Inheritance tax is a tax on the estate (i.e. property, money, and possessions) of a deceased person, above a certain threshold, that is passed on to their heirs or beneficiaries. It is payable by the estate before it is distributed to the beneficiaries, and the rate of inheritance tax depends on various factors, including the value of the estate, the relationship between the deceased and the beneficiaries, and any applicable exemptions or reliefs.

These are some of the other taxes that businesses and individuals may be required to pay in the UK, depending on their circumstances, activities, and assets. It's important to be aware of the relevant tax obligations and seek professional advice from a qualified accountant or tax advisor to ensure compliance with UK tax laws and regulations.

Contact us:
Follow the link below to get in touch if you have any questions or would like to learn more about how we can help you to understand and fulfil your tax obligations in the UK.