Businesses and taxation
A HMRC case study

Below is a list of Business Case Studies case studies organised alphabetically by company. To view more companies, please choose a letter from the list below.

Page 3: Helping business

Government plays a key role in providing business with advice and support. For example, the government organisation Business Link gives advice and support to new businesses (see Regional Selective Assistances, a system of government grants, also provide help on new business projects. For people new to running a business, the taxation system may seem daunting. Inland Revenue/Customs and Excise therefore provides a range of useful support services, including advice on:

  1. The taxes a business has to pay. The Inland Revenue/Customs and Excise have Business Support staff; websites and Advice Lines that provide specific advice e.g. how to register for VAT, Income Tax requirements for small businesses, Corporation Tax obligations for companies.
  2. Total tax liability. Self employed people must complete a self-assessment income tax form in which they declare their income for the year and claim allowable expenses. The Inland Revenue will then help the business owner to calculate their tax liability for the year, providing they have filled in their form by a specified date. The Inland Revenue has a self-assessment helpline (0845 9000 444) open from 8am to 8pm daily.
  3. Methods of payment. There are a number of arrangements for paying tax e.g. by direct debit, or some other agreed regular instalment payment system.
  4. Claimable benefits. There are various allowances against taxation. The tax authorities provide clear guidance on how businesses can benefit from these e.g. tax relief in the form of capital allowances for expenditure on business vehicles, machinery, equipment etc.
  5. Required documentation. The Inland Revenue/Customs and Excise advise all businesses to maintain a record system and update their records regularly. All records must be kept for five or six years from the latest date for sending back a tax return.

Reducing Costs

The tax authorities also provide businesses with help so that both they and businesses can save time and hence costs when dealing with tax issues. Online returns are an example of this approach. Nowadays, businesses can complete their tax returns and make payments online, thereby cutting costs and saving time. The tax authorities open a tax account for everyone who receives a tax return form. The Inland Revenue regularly dispatch statements setting out what has been paid, when and any outstanding balance.

Customs and Excise makes life easier for small businesses (turnover under £150,000 per annum) by letting them pay VAT as a set percentage on total turnover rather than their having to account for every transaction made at the standard rate (as is the case with larger businesses). Businesses with a turnover less than £150,000 in the first year of registration and those with a turnover of less than £660,000 after the first year can submit one annual return rather than quarterly returns and businesses with a turnover of less that £660,000 per annum can wait until they have been paid by customers before paying VAT to Customs and Excise.

HMRC | Businesses and taxation