Businesses have expenses that they can’t avoid, and tax is the main one. In fact, taxation is the main expense that is impossible to avoid altogether. Whether you like it or not, you will have to pay tax at some point, corporately or individually. For a big firm, it is an annoyance. For a small one, it is the difference between success and failure. Because you don’t want your business to fail, you should consider paying less tax. As long as it all above board, the taxman won’t knock on your door. And, it will free up money that is essential for the company’s survival. Here are a few tips.
Sweat The Small Stuff
A great way to pay less tax is to keep your finger on the pulse of your industry. There are generic tax rules that apply to all sectors. But, there are also individual rules that only apply to your industry. Those are the ones that you need to spot. Although they won’t lower your tax bill by a big margin, they do add up over the course of a year. Plus, it is better to have them on your side than to cast them aside. Look for everything from a ride to work scheme to uniform allowances. They are out, but you have to find them first.
Talk To An Accountant
The odds are high that you don’t have much expertise when it comes to tax. Not many people do because taxation is a broad and complex issue. If you don’t have any expertise, you need someone on your team that does know a thing or two about tax. Companies like Howlader & Co have been doing business finances for years because of their knowledge. Most companies also have a good amount of experience that comes in handy. All of it adds up so that they know exactly where to save and when to spend. Without help, you bill will go through the roof.
Flat Rate VAT
VAT for businesses is different than VAT for individuals. HMRC offer a flat rate scheme that allows you to pay a single percentage over the course of the year. Estate agents, for example, pay as little as twelve percent, which is eight percent lower than the twenty percent average. Yours might not be that low because it depends on the industry. However, there is a good chance it will be lower than the national rate.
At the moment, the personal allowance is about to rise to £11,000. And, you can use that to your advantage if your family play a role in the business. By giving them a proportion of the earnings, you can use the minimum allowance to save money. That is, of course, as long as they don’t already earn a wage. Otherwise, it won’t work.
The government wants people to be comfortable in their old age. For that reason, they are pushing pension schemes. At the minute, the pension scheme means that you don’t have to pay tax on your contributions. So, when you put it into your personal account or contribute to an employee’s, you can save a fortune.
It is important to note that all of the above is perfectly legal.