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Part of the process for setting up your own business involves deciding how you want to structure it. You may choose to set up a limited company, or you may decide to work as a sole trader. (And, if you get stuck, read our article about choosing a legal structure for your business).

The structure that you choose affects how and when you pay tax on any income that you earn. Check out our quick-start guide below.

The deadlines for submitting tax returns and paying the bill depends on which type of business you set up.

Sole Traders and tax

Sole traders pay their income tax and National Insurance by submitting an annual Self Assessment tax return. If you submit your return online, the submission deadline is 31st January, following the end of the tax year that it relates to. This is also the payment deadline.

If your tax bill is more than £1,000, then you will also need to make payments on account. Our guide goes into more detail, but these are effectively an advance on the following year’s tax bill.

Self Assessment tax returns submitted on paper forms must be submitted slightly earlier, by 31st October.

Tax return services

Limited companies and tax

Tax for limited companies is a little more complicated, because there are more things involved.

The company itself must submit a Company Tax Return and pay Corporation Tax.

Plus, the directors will need to submit Self Assessment tax returns to tell HMRC about income they take from the business.

Talk to one of the team about our online accounting services for sole traders and limited companies by calling 020 3355 4047, or get an instant quote online

About The Author

Beth-Anne Bruce

I'm an experienced and fully AAT and ACCA qualified accountant, who is enthusiastic about helping business owners succeed. I also love cooking and needlepoint (at different times!). Learn more about Beth.

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