Tax Law

This area of law covers the rules and procedures used by the government to calculate the tax that you
owe. The requirement to pay tax may arise when running a business, on any income that you regularly
receive, or on the profit you make, on any inheritance, to name a few. There are also tax rules in place for
VAT and the tax you owe to your local council. Depending on the type of tax you need to calculate there
are various rules and rates in place.

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Taxable Income

The amount of income you receive may be taxable. If you have received income from an employment(s), pension, proportionate of trading profits, property income or interest payments; these forms of income will likely be subject to tax, either at source (for instance, PAYE employees) or a date following your annual tax submission to HMRC. 

Income from selling certain assets that you own, for instance, a property that is not your main residence, shares in a business or business assets, you may need to pay capital gains tax on the amount you've gained from selling those assets. 

Tax Relief

There are various concessions in place to reduce your tax liability depending on your circumstances. For instance, you may not have to pay tax on a certain amount by the provision of an annual allowance or if income or assets were gifts, or you're an entrepreneur seeking company shares, or you're a business involved in certain research and development. These concessions will apply where relevant and the amount of tax due will be reduced. This is otherwise referred to as tax relief and an array of eligibility requirements will apply to each form of relief.

Business Rates

These are taxes that are charged on non-domestic properties based on the annual market rental value of the property. The market rent value of the property is determined by the size of the property and its usage. 

Corporation Tax

UK limited companies are required to pay corporation tax on their profits. A business will need to be registered for corporation tax within 3 months of starting to trade. Corporation tax will be due nine months and one day after the end of the business accounting period for its financial year. The current rate of corporation tax is 17% (1st April 2020). 

Council Tax

This is the tax that needs to be paid on a domestic property to a local council. The money collected via council tax is used for local services such as the local schools, roads, street lighting, and other local amenities. There may be exemptions or discounts that apply to your status or property status that removes or reduces your liability for council tax. 

VAT

Value-added tax (VAT) is a consumption tax added to the cost of goods and services. Registration is required for businesses that make chargeable supplies in excess of £85,000 in any 12-month period. HMRC will collect VAT through business assets, commission, items sold to staff, and business goods. 

Enterprise Management Incentives

This is a type of employee share scheme that allows employers to grant share options to its employees. In order for a company to qualify to grant enterprise management incentives to its employees there are various conditions that need to be met. Employees will also usually have to meet certain conditions in order to qualify under the scheme issued. 

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