Tax and NI

1. Different Taxes

1.1 A self-employed person, or any employee of a business, pays income tax (see 3-4).

1.2 A limited company pays corporation tax (see 5).

1.3 National Insurance is a form of taxation paid by both employers and individuals (see 13).

1.4 Value added tax (VAT) is a tax on 'supplies' (usually sales) of goods and services (see VAT).

1.5 Capital gains tax may be payable when you sell certain assets for more than you paid for them (see 14).

1.6 Inheritance tax may be payable if you die leaving assets worth over £312,000. This personal tax is not covered in this briefing.

1.7 Stamp duty land tax (SDLT) is charged on transfers of land and property.

• For commercial property transactions, rates on transfers (excluding shares) are 1 per cent on values in excess of £150,000, 3 per cent on values in excess of £250,000 and 4 per cent on values in excess of £500,000. All commercial property within designated areas is exempt from SDLT.

1.8 Stamp duty at 0.5 per cent is charged on share transfers.