new company

treehead

thinkin off settin up new ltd company what tax do i pay on profit after paying vat

Accountancy

treehead,
why a limited company?

VAT is not payable on profit it is payable on sales.
for ltd corporation tax is payable on profit.

maybe go chat to your accountant

treehead

Thanks for reply

but if company is service based rather than sales based is it not same

Accountancy

Not sure what you are saying?

VAT is payable on the sales no matter what type of sales they are ie service or goods.

CT is payable on the profit.

Profit is not equals to sales as you will have deductions/expenses.

NCG

I presume you mean that, in a service company, you will have little deductions so that your sales will almost all be profit. However, this ignores that fact that the salary you draw from the company reduces the company profit also. You pay corporation tax at 12.5% (generally) on the company profits, and income tax at your normal rate on the salary drawn.

I would strongly suggest you get some professional advice though before forming a company, as it may not be the ideal structure.

treehead

Thanks to you guys for helping me i have been an a employee for so long this paying me own tax etc is kinda freakin me out,will talk to an accountant soon and take it from there................................................thanks