Taxes you pay as a UK business owner

If you have a UK Limited company, you can expect to pay the following types of taxes:

• Corporation tax: Currently 25% if your profits exceed £50k in a given accounting period or 19% if your profits are less than £50k.
• VAT: 20% for eligible products and services but only if you need to register for VAT. You will typically charge your clients an extra 20% for the VAT so if you’re a smallish business, the VAT shouldn’t make a huge difference to your net income at the end of the year.
• Personal income tax: You’ll need to pay personal income tax for any salary or dividends you pay yourself via your company. If you keep your total take-home pay (salary + dividends) at about £50k, your personal income tax shouldn’t exceed £4k.