Tax can be complicated, right? In fact, it’s so nuanced that there’s an entire accountancy profession dedicated to understanding and applying its complex rules. That’s a lot to keep up with if you’re a small business owner.
At takepayments, we decided to make this all a tad easier. We’ve built a quick and easy tax calculator designed for sole traders and small businesses to get a snapshot view of the tax they should be paying.
All you need to do is throw in a few top-level details about your business (revenue, profit, etc.) and our handy calculator will give you an estimate of your tax and NI bill. It’ll even break it down into annual and monthly payments for you.
The calculator uses data you provide to work out your business’:
Here’s how these calculations work:
(Rates correct as at 2022/23 tax year as at 14/11/2022)
Once you know how much you can expect to pay on your taxes and National Insurance, it’s simpler to know how much you need to set aside. But when you’re a small business, saving is easier said than done.
Luckily, there are a few practical ways you can plan ahead to ensure you’re not left out of pocket — and you can still see your business grow, whatever the circumstances.
Business rates are taxes applied to commercial properties, like pubs, shops and offices. If you have a business premises and you’re looking for ways to cut costs, you might be eligible for discounted rates thanks to the UK government’s business rates relief schemes.
There are multiple relief schemes on offer. They include everything from relief for charities to exemptions for certain types of buildings. For more information, see our guide to business rates and relief schemes.
Ever got a bill that was higher than expected? You can help set aside enough cash to cover these instances by overestimating your annual spend by 10%.
Adding in a small buffer like this allows you to take unforeseen financial hits without going beyond your budget. Over time, you’ll develop a keener eye for costs that tend to land higher than you estimate, and create contingency plans for them.
While loyalty is valuable in your personal relationships, it can cost your business if you’re not careful. The market price of things like energy, broadband and insurance constantly fluctuates, so if you’re not comparing these things at least annually, you could be missing out on significant savings.
The same goes for payment providers. Make sure you’re not being stung by hidden fees and high transaction costs; get quotes from other providers to see where your rates are compared with larger businesses.
While not everything is up for negotiation, there’s occasionally wiggle room with suppliers to help you get more favourable rates in return for repeat custom — you just need to ask!
For example, if you’re renting your premises and your rates suddenly go up, you might be able to negotiate a lower monthly rental fee by agreeing to sign on to a longer-term agreement. The benefit to your landlord is that they won’t risk losing revenue for a few months between tenants — and will probably be willing to sacrifice a bit of income for that guarantee.
For more information, check out our top budgeting tips for small businesses.
At takepayments, we provide our business customers with plenty of support to help with taking payments.