As a business you will be responsible for calculating and collecting a number of different taxes. The following is a list of the main taxes that you need to consider. Not all will apply to everyone and the rates are usually changed each year in the budget. For an up to date guide to current tax rates please see our tax rates table.

Income Tax

If you are self employed or in partnership you will pay income tax on the profit the business generates. This is calculated annually and notified to the Revenue on a Self Assessment Tax Return which has to be filed by 31 January each year (for online Returns). Payment of tax is usually due in two instalments on 31 July and 31 January each year,

Corporation Tax

Corporation Tax is a tax on limited companies' taxable income or profits.

For Corporation Tax, companies have to calculate their own tax liabilities, and are liable to pay the calculated tax to the Inland Revenue without prior assessment.

Payment of Corporation Tax itself is due 9 months and one day after the company's "normal accounting date" - usually the last day of your annual accounting period.

Value Added Tax

VAT is a tax on the final consumption of certain goods and services in the home market but is collected at every stage of production and distribution. Most business-related goods and services will therefore be subject to VAT. There are several UK VAT rates, the standard rate currently being 17.5% however this is planned to increase to 20% from January 2011.

Companies should register for VAT if the value of your taxable supplies in the past 12 months or less has exceeded the current VAT registration threshold or the value of your taxable supplies in the next 30 days alone is expected to exceed this threshold. It is important to remember that turnover is the amount of money going through the business, not just the profit.

It is also possible to voluntarily register for VAT if your turnover does not reach the current threshold.

There are a number of different schemes available to business to make the calculation and collection of VAT less of a burden. These include the Cash Accounting scheme, Flat rate scheme and Margin schemes.

Construction Industry Tax

The Construction Industry Scheme (CIS) sets out the rules for how payments to subcontractors for construction work must be handled by contractors in the construction industry.

Contractors have certain obligations under the CIS, including registering with the scheme, checking whether your subcontractors are registered with HM Revenue & Customs (HMRC), paying subcontractors, deducting CIS tax at the appropriate rate and submitting monthly returns.

National Insurance

National Insurance is another deduction from earnings which is based on individuals earnings. No national insurance is payable on company profits, nor is National Insurance due on investment income (ie bank interest and dividends). There are several ‘classes’ of national insurance which are due in different circumstances:

Class 1 - Employees contribution based on gross earnings and employers contribution also based on earnings.

Class 1A - Paid by employers who provide benefits to employees

Class 2  - A fixed weekly rate paid by sole traders and partners

Class 3  - A fixed rate paid voluntarily to protect pension entitlement

Class 4  - Self employed/partner contribution based on business profit

PAYE

Pay As You Earn is a scheme operated by HM Revenue & Customs to take income tax from employees as they earn it. The amount due is based on employees earnings.

Capital Gains Tax

This is the tax due on individuals when they sell certain assets for more than they cost. Every individual has an allowance each tax year where gains made up to this amount are not taxed. Different reliefs are available for different types of asset sold.

Companies do not pay Capital Gains Tax but they do pay Corporation Tax on the value of any gains made. There is no annual allowance for companies.

Stamp Duty Land Tax

SDLT is usually payable when you buy or lease land or property - it's also sometimes payable on transfers of ownership of property or land. Stamp duty is also due when you buy shares using a stock transfer form.