What is tax?
Definition of tax
Tax is a sum that has to be paid to the government when a business, or an individual, earns money.
Tax comes in various different forms. For example, limited companies must pay 20% of their profit in Corporation Tax to the government. When individuals go shopping and buy goods, they may have VAT (value added tax) to pay to the retailer, who keeps the VAT that all his/her customers pay and hands this on to the government.
The government spends funds that it receives from tax on public services, such as building roads and providing state education.
Tracking your business's tax liability
FreeAgent has a Tax Timeline which enables you to see your upcoming dates for Self Assessment, VAT, Corporation Tax and payroll. You can even see how much tax you need to pay.
Got questions? Ask Emily!
FreeAgent's Chief Accountant Emily Coltman is available to answer your questions in the comments.