Want to minimise your next tax bill?
Here are some top tips to save tax for your business
You should know your industry, by keeping engaged with your trade body or association. It will allow you to understand any social allowances or dispensations that HMRC have approved, for example uniform allowances.
Additionally, as a company you can claim on investment goods. As you can claim capital allowance on plant and machinery such as:
- Vehicles used for business
- Changes in the business to install plant and machinery
- Cost of demolishing plant and machinery
To find out more information on how to claim capital allowances click here.
VAT is a common factor most business owners lose out on, so you need to know your VAT. If your sales are more than £85,000 in the previous 12 months you MUST be VAT registered.
Make sure If you are not VAT registered that you have a process in place that proves you are entitled to stay non-VAT registered. For your business it is vital you monitor your sales every month.
If your sales are less than £150,000 considered using the flat rate scheme.
The Flat Rate VAT scheme is where you pay a single, flat rate of VAT on your turnover. HMRC have different VAT rates for different industries. You choose the VAT rate most suited to your industry and apply the percentage to your gross turnover in the quarter and then pay this to HRMC. This is sometimes easier to administer and could result in you paying less VAT and gain unexpected profit.
If you are VAT registered and your turnover is more than £85,000 a year you will be affected by Making Tax Digital, click here for more information.
3. Working from home
Tax savings for self-employed businesses that do work from home have been allowed from HMRC. Most businesses claim use of home charge of £2 per week but HMRC can allow you more than that. The ‘use of home’ claim is for businesses who use a dedicated room in a house for work.
You can claim for the following if you are a self-employed business owner:
- Council tax
- Mortgage interest
- Water, light and heat
- Landline and phone costs
- General household repairs
- For more information on business tax for self-employed click here
Click here to find out more information.
Personal allowance is currently £12,500 of tax-free income. By assessing your family situation, it may be possible to utilise personal allowances for any members of your family who are able to carry out duties within your business.
Your personal allowance may rise if you claim for marriage allowance. This is where £1,250 of your personal allowance can go to your partner if they earn more than you. To benefit as a couple, the lowest earner must normally have an income below £12,500.
There are numinous tax-free benefits that can be paid to staff that will save both yourselves and your staff tax. By providing:
- Mobile phones
- Forms of transport to and from work
- Workplace nurseries
- Sport and recreational facilities
- Health checks
- Paying relocation expenses
- Employee mileage
All the above are bonuses that can result in saving tax for companies in the UK.
If you would like to discuss anything related to this article or if you need advice on saving tax click here to contact us.