International Start-up Tax Tips to Keep Your Small Business in Order

Starting and operating a small business involves risk taking and key decision making. A majority of the decisions made in business revolve around financial and legal matters. The financial aspects of business decision making encompass transactions the business enters into with other stakeholders. On the other hand, the legal perspective entails an understanding and effective application of the guidelines, laws, principles, procedures and regulations that are binding to all businesses. A key element captured under the legal framework in the United Kingdom is taxation of business entities, irrespective of the size or complexity. Generally, various types of taxes are charged on income earned by both businesses and individuals who are stakeholders in the business entities. Compliance with the state and federal tax requirements is crucial as it keeps international businesses off unnecessary problems with the authorities. Here are five international Start-up Tax Tips necessary for keeping your small business in order.


Register for Taxes

It is imperative to register the small business with the federal government for a Federal Employer Identification Number. Besides, the law requires that you register the start-up with the respective state where the business is set to operate and subsequently seek sufficient information about various types of taxes such as corporate tax, income, payroll and sales tax. It is also important to get access to information about different tax assistance and reduction programs available.


Comply with Foreign Accounts Compliance Act

If the start-up holds financial assets outside the country’s borders, it is crucial to follow and uphold all the provisions spelt out in the Foreign Account Tax Compliance Act (FATCA) to the letter. The Act emphasizes information reporting by foreign financial institutions, non-financial foreign entities and citizens holding financial assets in foreign countries. In this case, even small start-ups are not left out.


Report Foreign Income

Bearing in mind the fact that Income from abroad is taxable, it is imperative that you report your foreign income honestly in the appropriate tax returns so as to avoid the possible consequences of falsehood or hiding foreign investments.


Get tax Protection

Your small business deserves the right tax protection. To obtain adequate tax protection, it is crucial to seek tax advice from the Revenue –trained specialists. The experts provide sound information on the right tax protection for various businesses to avoid undue pressure from unfair tax investigation.


Take advantage of the Tax Incentives

There are myriad tax benefits and incentives that businesses are entitled to and your start-up is no exception. An example of such incentives is the research and development (R&D) tax relief which is claimable by trading companies of all sizes. In particular, the R&D Tax Relief provides a “super deduction” over and above the actual amount spent and allows enhanced deductions from loss-making companies to be ‘cashed-in’ resulting into cash repayment from HMRC. There are many other tax incentives that small businesses are entitled to. It is important to develop a thorough understanding of the tax benefits and credits so as to make claims as and when they fall due.


A business that follows the above start-up tips, greatly avoid problems with governments. To be successful, ensure you follow all the legal procedures and regulations regarding taxation of your small business. When it comes to reporting information relating to taxation, it is wise to disclose all the relevant information about the business without hiding any facts and figures. Before paying the amount of tax due, it is important to consult the revenue experts to compute the tax benefits deductible. In real sense, such tax benefits would reduce the burden of tax payment that the business is obliged to service thereby increasing the profitability levels of the business.


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