Tax Blog 2023

I don’t know about you but we enjoyed our fair share of turkey and mince pies, but now it’s time to work that off and get started on building your business with Mobile Gym Fitness.
We’re going to share with you some of the key aspects of building and running your own business, all of which you’ll be supported with if you choose to join Mobile Gym Fitness as one of our amazing franchisees.
What better way to kick off the business blog series that to talk about tax…. 
No, no don’t run away, we’ll keep it light 😊
Tax isn’t this super complicated thing that we’ll never hope to understand, but it is helpful to understand some of the basics. Let’s look at 4 of the most pertinent to small businesses (especially Mobile Gym Fitness franchisees).
Income Tax – Sole traders pay income tax on their business profits. In the UK there is an allowable amount of income that you can earn before you pay any tax at all! Currently (and we stress currently at the time of writing) that rate is £12,570. This means that you can earn up to this amount and not pay any tax at all. Great!
However those sneaky busybodies at HMRC (which stands for Her Majesty’s Revenue and Customs) have created brackets that apply a level of taxation as a percentage to all levels of income… drat!
Those bands are here below, and the percentage of tax you’ll have to pay:
  • 20% – £12,571 – £50,270
  • 40% – £50,271 – £150,000
  • 45% – £150,00+
Remember to check locally if you live in Scotland.
It can get a bit more complicated than this if you earn income via a Limited Company, you can take dividends as a form of payment (as often as you like) but, you guessed it, there’s tax to pay on dividends too, depending on your rate of earning from above:
  • 8.75% – Basic rate
  • 33.75% – Higher rate
  • 39.35% – Additional rate
National Insurance – As we work all of our lives, we all look forward to and hope for a nice healthy state pension in the end. Well it’s our National Insurance contributions that go toward paying for it.
It is a bit more complicated to work out how much you need to pay so here’s our first ‘get out of jail free card’, speak to an accountant!
In short though:
  • Profits less than £11,908 means you pay NO National Insurance
  • 9.73% on profits £11,909 – £50,270
  • 2.73% on profits £50,271+
If you’re running a Ltd company, you’ll need to deduct employee contributions in from your salary and pay these to HMRC. Your company will also have to pay employer contributions, at the following rates:
  • 13.25% for pay £1,048 – £4,189 per month
  • 3.25% for pay £4,190+
…but speak to your accountant about this.
VAT (Value Added Tax) – If you’re earning more than £85,000 per year, you will need to register for and pay VAT. This is a charge that all business have to charge their customers for providing their goods or services (weird I know). This is paid to HMRC, but as you are registered for VAT, you can claim this back as business expenses (so you don’t lose out).
Rates are currently:
  • 20% – Standard Rate
  • 5% – Reduced rate
  • 0% – In exceptional circumstances
Honestly with this one, just speak to an accountant!
Corporation Tax – If you’ve setup a limited company, the ‘business’ (not you), will pay Corporation Tax on its ‘profits’. There’s no allowance equivalent here, it’s just a simple flat rate of 19%.
If you’ve gotten this far, thank you and well done. It’s not exciting stuff, but it’s super important for all business owners. Fortunately for Mobile Gym Fitness franchisees, we offer support, guidance and signposting through all of this so you can get on with the business of training your clients.
We even know how you can do more training with our Fitness education partner (Future Fit) for free!
Drop us a line and chat to us to see how we can transform your life and build your fitness business together.
All of this wonderful information was taken directly from the UK .gov website –