The Holy Grail of accountancy is to provide tax saving tips that will work for everyone, every time. The list set out below will provide a saving for you if you work through them all. In my experience there is not a single silver bullet to save tax but rather a series of small savings that add-up to something quite special.
- Know your industry – Each industry has its own peculiarities with industry specific expenses allowances claims, special dispensations and tax rules in use. Many of these are not well know or well publicised but they are there to be used.
- Focus – Ask your accountant to look into low-cost standard processing tasks such as payroll or VAT to provide you with the reassurance that all taxes are being optimised and claims made where possible.
- Know your VAT – Industry specific Flat Rate Schemes, dispensations, specialist schemes, dealing with International aspects of VAT, the list goes on and on. VAT is an area where it is very easy to get it wrong and pay too much VAT.
- Use your accountant – Your accountant has a wealth of knowledge so use it! Tell them everything you are trying to achieve and pick their brains in how this can be done. A small investment could save a huge amount in tax.
- Family – Can wages or profits be paid to other members of the family working in the business? Can retirement planning be addressed through the business?
- Be organised – Keep good records to allow the maximum claims to be made. In many cases the difference between a tax efficient or inefficient business is simply good house-keeping.
- Pay yourself efficiently – Use the correct balance of salary and dividends (if you are a limited company) or consider whether a limited company structure may be beneficial to you. Consider the timing of payments around the end of a tax year as this would defer the tax payment.
- Cars – Is a commercial vehicle an alternative? Consider how the car is paid for business or privately? As cars become more efficient it is worth revisiting the options of a company car again in comparison to mileage claims For non-limited businesses consider what business proportion of motor expenses you are claiming and is this still correct?
- Tax free – Look to maximise all your tax free options such as using ISA’s rather than traditional savings accounts.
- Pensions – Recent changes to the pensions’ regime have made these more attractive so consider if your retirement provision is adequate and whether you can save tax by using pension planning.
If you would like to know more about how these can be applied to your business then please call me Michael Andrews on 01302 752700 or email at firstname.lastname@example.org to organise a meeting.