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Not sure if my knowledge is correct on Taxes

Not sure if my knowledge is correct on Various Taxes

Hi,

 

So I've recently started an LLP with a partner of mine, and even though I've already talked to an accountant, I still don't understand a few things:

1. If I am not VAT registered, I don't have to charge VAT (below 85,000 pounds turnover)

2. I have to pay a 20% income tax on my net profit, but Do I have to pay this on my personal tax reports and not on my LLPs tax reports? Which form has to be filled for this?

3. I don't have to pay the 7.5% Dividend tax, so I don't have to fill out the SA100?

 

Thank you in advance, all answers are appreciated

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09th Feb 2019 09:57

Mate, if you didn't understand it coming from someone sitting opposite you that you were paying to explain it with the help of some join-the-dot pictures, why do you think you'll get it when some sarky [***] like me tries in here?

Just let your accountant deal with this while you and your partner run the business.

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09th Feb 2019 11:54

Hugaga wrote:

even though I've already talked to an accountant, I still don't understand a few things:

Talk to him/her about your questions. It's pretty basic stuff.

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to Accountant A
09th Feb 2019 12:10

Dammit - good spot. You should be a lawyer.

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to Tax Dragon
09th Feb 2019 12:19

Tax Dragon wrote:

Dammit - good spot. You should be a lawyer.

If I had my time over, I would be. I don't think that the legal profession has been devalued like accountancy has.

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By DJKL
to Accountant A
09th Feb 2019 13:10

Be careful what you wish for.

I had the option, near obligation, to do law after my first degree, I had a father desperate for one of his four children to follow him and my mother into that profession. I was choice three after my two older siblings rejected the overtures of him offering to pay for us to return to university, find us an apprenticeship through the wonderful nepotism of the 1970s and 1980s and the temptation of a subsequent partnership with his firm- we all ran for the hills, my refuge being accountancy.

As someone who was brought up in a house with both parents being solicitors, and observing all that involved, from clients calling at 3.00 am to the house, inter partner politics and disputes etc at work, I would not wish the practice of law on my worst enemy.

My father himself ended up burnt out by it all and retired at age 55, the grass may look greener but I am not convinced it really is.

(For one thing .apart from clients giving regular, recurring, work, have you any idea how many clients you need to accumulate to build a sustainable legal practice- it is in the thousands as I know to my cost, I once had the wonderful summer job of cataloguing all the client files of his firm detailing name, partner, matter, last file activity- it took me weeks of evenings and weekends just to prepare a handwritten list, the client filing shelves were vast and seemed never ending).

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to DJKL
09th Feb 2019 13:23

I think AA can rest easy... you have to have done something really bad to come back in the next life as a lawyer. (Oh hold on... he's been an accountant this time round...)

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to DJKL
09th Feb 2019 13:24

JOKE... no offence intended to any accountants (or lawyers, or indeed sons of solicitors) reading this.

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09th Feb 2019 12:03

Methinks he hasn't spoken to an accountant but just dropping that sentence in to make it look like this free advice forum isn't his first port of call

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to DaveyJonesLocker
09th Feb 2019 12:16

That was my guess too but I thought that, if the OP preferred to claim to be stupid rather than simply be honest (and thereby get an honest response), who was I to disagree?

And I missed the point that AA noticed.

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to DaveyJonesLocker
09th Feb 2019 12:22

DaveyJonesLocker wrote:

Methinks he hasn't spoken to an accountant but just dropping that sentence in to make it look like this free advice forum isn't his first port of call

If you come away from a discussion with an accountant still not knowing whether you need to file a self-assessment return, then there really is a communication (or knowledge) issue.

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to DaveyJonesLocker
09th Feb 2019 12:32

Just spotted they've also asked which form to fill in. Hmm, surely the accountant would be doing this?

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09th Feb 2019 13:55

1. VAT is normally charged at 20%
2. Basic rate income tax, like the standard VAT rate is 20%.
3. If you don't pay the tax you owe, there may be problems.

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09th Feb 2019 13:58

Was Class 4 NIC discussed at this informative meeting?

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09th Feb 2019 17:21

1. Au contraire, you MUST not charge VAT. It's not like an optional thing. Probably a more pertinent question is why you're an LLP at this modest level of turnover ?

2. We call them Tax Returns rather than reports. It's not as simple as 20% tax but, in principle, you're right. You pay the tax, not the partnership.

3. Afraid not. There are other taxes that are dealt with on SA100 and income tax is one of them.

Way out of your depth. Get an accountant before you drown.

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to lionofludesch
09th Feb 2019 22:20

IMHO it's unhelpful to answer a question posed in ignorance with an answer that presumes knowledge - because you apply your knowledge in interpreting the question, and on so doing risk misinterpreting the question.

Still, we agree on the advice, which is the main thing the OP should take from this thread.

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to Tax Dragon
10th Feb 2019 07:58

True, true, how true.

And yet, if you don't illustrate the complexity, the OP will continue to take the John the Plumber view of the problem.

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to lionofludesch
10th Feb 2019 10:32

Yes but if said OP acts on your answer (and ignores your advice) and finds s/he's been tipped from the pan into the fire in consequence, have you helped? You could point to the "don't act on what you read in here" disclaimer that Aweb provides. But as that's nestled with the preamble the AA habitually cites about who this forum is aimed at, which the OP has ignored, what's the chances of them paying any heed to the disclaimer?

That's how I see it anyway. I take your point too. ("Yes but" meant yes! :-))

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