Tax Planning Ideas For The Smaller Business

There are numerous tax planning ideas available to both large, and small businesses to help save money on the dreaded tax bill. With a minimum amount of research needed, it is worth spending a little time ensuring you have checked your company’s entitlements.  

Is All Income Being Dispensed Efficiently?

Income tax is often one of the biggest headaches for a company, with a big staff bill usually the cause of the problem. Look at how your company’s income is distributed and see if you could make changes.

How do you take profit from your business? Could Director’s take dividends instead of salaries, or even a mixture, to reduce the PAYE bill? Keep an eye on the current tax years threshold to ensure you don’t exceed it. Can you time certain business expenses to improve your cash flow situation?  

Does Your Company Operate a Pension Scheme?

With the introduction of workplace pensions, there are many benefits to be gained from operating your own pension scheme. Smaller businesses should take time to look at the types of pensions that will provide them the best tax savings. When a company contributes to their employee’s pensions, a specific tax relief is available for them as an employer.  

Is Your Capital in Check?

Are you aware of the capital allowances that your company may be entitled to? Capital allowances can be claimed on a wide range of capital assets, such as machinery, fixtures and fittings, which can lead to a significant reduction in taxable profits. Some allowances initially offer as much as 100% of the allowable expenditure to begin with, before reducing this figure over time.  

Do You Need to Register For VAT?

If you aren’t registered for VAT, check the current tax year threshold to ensure you are able to continue without registering. If your company is registered, consider joining the Flat Rate VAT Scheme to make all aspects of your VAT simple. You could possibly pay less overall tax in the process. This scheme also aids cash flow by allowing you to claim VAT on an invoice paid date, rather than its issue date.  

Do You Drive Wisely?

Is your choice of business vehicles a wise tax decision? As your business grows, such investment vehicles need to reflect the changes. Does your company really need a company car scheme, or is it possible for some members of staff, particularly Directors, to use their own private car whilst claiming mileage? This way is more tax efficient.

It is possible to reduce tax by finding possible tax breaks and opportunities. Whilst there is no getting away from this inevitable expense, being aware of possible tax planning ideas ensures there are legal ways to make sure you pay the right amount, without paying any more than you need to.  

Accountants in Hull

Want to know more about tax planning options for businesses? Call one of our accountants in Hull us on 01482 598694 or email hull@hwca.com for tax planning advice. Alternatively contact us online.