Tax is a dull but necessary topic, which business owners all have to deal with at some time. Although tax must be paid, it is beneficial to minimise your bill wherever possible using legitimate methods.
While struggling trying to organise business records and deal with clients, it is relatively easy to fail to claim all eligible expenses or maximise the benefits of capital allowances. Here are some ways to ensure that you legally pay minimal tax:
Meeting deadlines
Complete and submit all tax returns and payments in a timely manner to HMRC or Companies House, so that you avoid the unnecessary receipt of penalties and late payment charges. Failure to meet deadlines will also increase the likelihood of being investigated by HMRC.
Claim relevant expenses
Make sure that you claim all eligible allowances, relief and expenses, so that you reduce your taxable profit. A reputable accounting service will make sure that you claim everything you are able to, so that you can minimise your tax bill. Capital allowances, Annual Investment Allowance and many others will all have a financial impact on your end of year tax bill.
Accurate business records
To avoid penalty charges, maintain accurate commercial records, which should be retained for six years. HMRC could require access to your financial files at any time, either as a spot check or as part of an investigation. You must provide accurate and timely records, often at short notice. Failure to comply with HMRC in this aspect will result in a hefty penalty.
Your accountant
Your professional advisor will not only deal with financial aspects of the business, but will also provide help with other fiscal tasks, like your marketing or investments. In addition to advising on tax matters, an accountant will add value to your business in other areas, including recruitment. Although you may view the cost as an extra expense, hiring outsourced accountants can actually be viewed as an investment in the future of the company.
Registering for VAT
VAT is a complex topic that confounds a number of business owners. Although most managers and owners will recognise the yearly threshold for VAT and when a company must be registered, there are other aspects that are complex, such as which VAT scheme to register for. There are a number of schemes available, and all have some benefits for a company, along with potential drawbacks.
Running a business involves having to know a lot about various subjects, including tax. However, you can also give us a call, so that we can provide further information about minimising your tax bill.