Business tax planning
Running your own business isn’t easy. The stresses and strains associated with managing employees, generating new business, drawing up contracts, and simply getting on with the tasks at hand mean something almost always goes overlooked. One area which can prove particularly complex – and one that is daunting for the layman – relates to your business tax planning.
Putting together an effective tax planning strategy is, however, critical for minimising your tax liabilities and payments to HMRC, as well as helping your company achieve financial goals. For example, working alongside an experienced tax accountant will enable you to put in place processes that help lower the amount of taxable income, reduce the tax rate, and maximise the tax relief and credits that may be available.
Areas of planning
So, what are the areas of business tax planning that require attention?
First and foremost, an experienced tax accountant will be able to provide guidance on corporate tax liabilities should your business be a profit-making company. They will often be able to work alongside you in bringing forward costs, deferring income or profits, and managing capital allowances all with the objective of reducing your annual corporation tax bill. With such a bill amounting to 20% of your company profits, anything you can do to limit this is well worth pursuing.
In addition, a tax accountant will be able to plan the best way for you to get paid and pay your employees. For example, it may prove more effective for you – as a director – to take a large sum as a dividend as opposed to being salaried should you be retaining a large profit in your business. Through the expertise of a tax accountant, you will be able to plan for the most tax efficient payment options.
Tax is a notoriously complex area, which is why it represents such a lucrative business for firms working within the industry. Because of this, it’s no surprise that many people may well feel compelled to handle their own finances, thereby aiming to save some money.
However, with the complexities and fluid nature of the tax industry, it can be difficult – if not impossible – for you to stay fully up-to-date with the latest changes to laws and legislation should accounting not be your primary role. In this respect, saving a few pounds on appointing a tax accountant that may be able to save you many thousands over the course of a year may prove disastrous.
Speak to an expert
The best way to effectively manage your business tax planning is by liaising with an experienced tax expert. These highly qualified professionals have the knowledge and expertise to help ensure you reduce your tax liabilities in a manner that is most cost effective for you.