There are many companies that are paying more tax than they need to be. With that being said, read this article on tax-saving tips for small businesses to discover some top tips on how you can reduce your tax bill.
Pay yourself efficiently
You need to ensure you pay yourself in the most tax efficient manner. The way you pay yourself will influence the amount of tax you are responsible for. Most limited company directors tend to pay themselves a salary. A salary of up to £11,850 will make you free of income tax, as it should be covered by your personal allowance.
Commit to bookkeeping
One of the reasons why a lot of people end up paying too much tax is because their books are not in order. Not only does this make it difficult to file your tax return, but you also need to have records of everything in case HMRC decide to look into your taxes.
Take advantage of benefits
There are many different tax-free benefits that you can take advantage of. This includes tax-free childcare vouchers and the cycle to work scheme. With the latter, not only can you make tax savings, but also 25 per cent can be saved on the price of a new bike.
Know your VAT
This is another area where a lot of business owners are missing out. There are many companies that are paying far too much VAT. One reason for this is because they are using the wrong accounting scheme. There are various schemes to choose from, and one that is certainly worth considering is the Flat Rate VAT scheme. Under this scheme, you will pay a single, flat rate of VAT on your turnover. The flat rate you will pay depends on the industry you are in. However, this is often a great way for businesses to save money.
Know your industry
Last but not least, it is important to get to grips with your industry. There are often special allowances and dispensations approved by HMRC for certain sectors. For example, in construction, you can deduct capital allowance from taxable profits, for example, for safety measures and thermal insulation of industrial buildings. If you don’t stay in the know, you won’t be able to claim for any of these.
Tax-saving tips for small businesses
If you’d like to discuss tax-saving ways to leasing computer hardware and software for your business, please get in touch today.
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