If you’re planning to start a small business, it is important that you understand the business taxation system. Tax accountants can help you with the taxation aspect of setting up your business. It’s important that you file your tax returns on time and accurately to remain in compliance and to avoid costly penalties.
It’s simple and easy to start a business; you only need a business license if you create a limited company, and when you’re business is really small, you’re exempted from VAT. However, limited company or not, small business or large, you’re required to file annual tax returns. Again, the standard corporate tax rate is already minimal, but you can ask accountants for advice regarding tax-efficient structures that may work for you.
With regards to domestic taxation, if you’re a non-resident business owner, you’re better off in a way because you’re only taxed based on the source income in that country of choice. Yet, this means your business doesn’t have a permanent or a fixed address, which might be a turn off to some customers. If you’re selling overseas, you’re going to deal with withholding tax, double tax treaties and VAT, in addition to local income taxation or domestic taxation. As mentioned, it’s really a thick jungle and you’re going to thank tax accountants for their golden advice on these matters.
Having the right tax structure sorted out at the beginning helps you see through the jungle of taxes. At first glance, the system can appear simple but in truth it’s full of complexities. Tax rates heavily depend on how your small business was formed. Individual traders are charged more than limited companies, and this might compel you to form a limited company. However, if your business is capital intensive, it’s often sounder to operate as a limited company than a sole trader. Your accountants can help you figure out the figures in connection with setting up a small business.
Business taxation becomes a lot more complicated if you take on employees. You need to calculate and deduct tax due on your staff’s salaries based on the pay-as-you-earn or PAYE system. Although there are government incentives for employing people, always consider your business requirements first. If you need more hands to be productive, consider hiring contractors. Contractors file and pay their own tax returns. When you do hire people, impose a viable recruitment process where you get to welcome aboard exceptional hires not liabilities. Consult accountants for enlightenment on employment and tax.
Kilcoyne Accountants are one of Ireland’s leading accountancy firms and are a progressive firm of chartered Dublin Accountants & Registered Auditors. Kilcoyne are leading Tax Accountants in Dublin and provide a number of sources such as handling auditing, payroll, liquidation, taxation and outsourcing accounts.