If you’ve worked in salaried employment, you don’t have to worry about income tax deductions as this is all looked after under the PAYE (Pay As You Earn) scheme. You receive a net wage or salary after the relevant deductions have been made.
However, when you are self-employed or a Director of a Limited Company, the tax regime changes. Income may include a combination of salary and dividends, each having its own tax rules and rates.
You report your income to HMRC via an annual Self-Assessment income tax return. Income tax is calculated and is payable by 31st January in the year following the end of the tax year (5th April).
Aside from the reporting requirements, one of the main changes is having an annual tax bill rather than monthly reductions in your payslip.
TF Accounts can provide advice on how best to utilise the tax allowances available, to optimise your income and to ensure that you meet all the compliance requirements.
Make sure you take full advantage of the tax saving opportunities open to you – Contact Us for a personal tax planning review.
