Tax
Understanding your tax obligations as a small food producer.
Updated 12 June 2024
Introduction
Tax threshold
There is no need to register for any taxation service or file any accounts if your business earnings are under £1,000 a year. It is important to note that any expenses paid to you from other sources also contribute towards the £1,000 limit. If you do surpass this figure you will be required to register as self employed.
Self employed
After you register as self employed you will be required to submit an annual Self Assessment tax return. You can find out where and how to do that at the following link: Working for yourself
Sole traders
If you are setup as a sole-trader you will pay income tax on your business profits once your allowable deductions for expenses are calculated. The rate of tax you pay is linked to your standard income tax rates and would be combined with any PAYE income you receive from any other jobs. You can learn more about tax as a sole trader here: When you need to set up as a sole trader.
Limited companies
If you run a limited company you must pay corporation tax on your profits. You can find out more about registering and paying corporation tax in Scotland here: Corporation Tax, Business Taxes