New Business - Tax Free Period?

[FordMan]

Hi, I’ve Google’d a bit but I can’t seem to find any concrete information in regards to this.

Is it true if you start up a new business that there is a tax free period for a couple of years before you have to open up your books? Apparently it was set up so new businesses can get a chance to thrive. It sounds highly strange that the taxman would be this generous.

Thanks!

 

[David Griffiths]

The only time that I've heard of it is from a saloon bar tax expert - it's a bit of a myth. In fact, it's quite a lot of a myth!

 

[FordMan]

The only time that I've heard of it is from a saloon bar tax expert - it's a bit of a myth. In fact, it's quite a lot of a myth!

I see. A friend of a friend opened up a shop front a few years back and he claims he hasn't paid a penny in tax in 18 months! His accountant put him into this ‘class’ apparently. He said he’ll ask his accountant what it is he classed him as but this was ages ago.

I hate it when people are never straight up with you when they gloat. They show off then they hide what it is like some sort of top secret information. Out of frustration I thought I’d come ask here.

Thanks again for the reply.

 

[Scalloway]

It could be that the OP means the NI holiday that is avialable for new businesses

http://www.hmrc.gov.uk/paye/intro/nics-holiday/eligibility.htm

 

[andygambles]

I see. A friend of a friend opened up a shop front a few years back and he claims he hasn't paid a penny in tax in 18 months! His accountant put him into this ‘class’ apparently. He said he’ll ask his accountant what it is he classed him as but this was ages ago.

I hate it when people are never straight up with you when they gloat. They show off then they hide what it is like some sort of top secret information. Out of frustration I thought I’d come ask here.

Thanks again for the reply.

When starting up you can potentially go almost 22 months without paying any corporation tax.

This is because corporation tax is due 9 months from the end of your financial year and your financial year runs for 12 months from the end of the month of incorporation.

IE incorporate 1st December 2011. End of financial year is 31 December 2012. Tax Due 1st October 2013.

 

[FordMan]

Aww, this is making much more sense now. Keep 'em coming

 

[andygambles]

Aww, this is making much more sense now. Keep 'em coming

This isn't a Tax Free period though. You still have to pay tax on your profit but not until it is due.