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PAYE

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ACCOUNTING

Paying PAYE

Pay as your Earn (PAYE) – Sounds simple yeah? You receive your payslip monthly, and your tax has magically been paid to the government. This isn’t the case – for Limited Company owners, paying PAYE can be a black hole.

Are you a sole trader, then you do not need to fret about PAYE, as your tax is filed out through your tax return at the end of the tax year.

Have you just set up a Limited Company or maybe you are considering setting up as Limited, then you must to file your PAYE through the Limited company.

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Pay as you Easy (PAYE) is the process of paying Income tax and National Insurance (NI) directly to the government. All employee’s throughout the country must pay tax through there wages. The value of PAYE given to the government through someone’s wages very much depends on their total income.

Now the more complex part, if you own your Limited Company then you are actually an employee of the Limited Company. This means that you as the Director must pay PAYE from your wages (NOT DIVIDENDS!!). If you also have company employees, then PAYE must also be deducted from their wages.

TAX REDUCTION RELATED TO COSTS

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Management accounting focuses on the measurement, analysis and reporting of information that can help managers in making decisions to fulfil the goals of an organization. In management accounting, internal measures and reports are based on cost-benefit analysis, and are not required to follow the generally accepted accounting principle

Tax accounting in the United Kingdom concentrates on the preparation, analysis and presentation of tax payments and tax returns. The UK tax system requires the use of specialised accounting principles for tax purposes which can differ from the generally accepted accounting principles for financial reporting.

Depending on its size, a company may be legally required to have their financial statements audited by a qualified auditor, and audits are usually carried out by accounting firms.