Saving money on taxes should be a top priority for business owners. As you have to run your business, you have to keep everything planned in advance. You can get best business advice & support from ACCOTAX Accountants for your accounting and taxation necessities anywhere in UK.
Have a look at top 1o best tax saving tips.
1. Take money out of your business within the most tax-efficient way
If you’re a Ltd. , it is sensible to require money out via a mixture of salary and dividends. There also are other tax-efficient strategies to explore to maximize tax savings.
2. Pay your spouse a tax-efficient salary
Whilst the salary must be sensible and reflect the work administered (and must be paid), if they earn quite £111 per week they’ll qualify for a basic state pension and therefore the additional state pension. If they earn below £153 there'll be no social insurance Contributions liability.
3. Consider paying class 2 National Insurance Contributions
If you're getting below the earning exception, then you'll be not eligible to pay class 2 National Insurance Contributions. In this scenario, you might need to continue paying contributions to create up your entitlement to a State Pension.
4. Make Partners if you're a sole trader
This can assist you make significant social insurance savings for both you and key individuals by making them partners, whilst also tying them into the business.
5. Future Planning of Tax
When investing during a new house, office, vehicle, computer or the other business equipment, find the simple time to shop for them
Tax relief is received tons quicker if you create the acquisition shortly before instead of shortly after your business year-end.
6. If you’re self-employed, confirm the Taxman sees it that way too!
A one-man band business (not a limited company) may firmly believe they're self-employed, but they ought to confirm there's no possibility of the Taxman charging you more because he views you as being ‘employed’ by one or more of your best customers.
7. Consider whether your business would be more happy as a sole trader, partnership, LTD or indebtedness partner-ship.
For some businesses the scales may have tipped in favour of becoming a corporation , except for a couple of others it's going to now be better to travel back to being a sole trader or partnership. indebtedness partnerships could also be better than either of those options for a few businesses.
8. Plan ahead and minimize your tax bills once you sell the business
With proper planning at an early stage, you ought to be ready to keep far more of your money in your pocket and not let the Taxman take up to 59% of everything your business is worth.
9. If you're not already VAT registered, confirm you've got a system that ensures you're still entitled to remain non VAT registered
If your sales within the previous 12 months are quite £85,000 for the tax year (2018/19) then you want to register for VAT immediately, so it’s vital to watch your 12 monthly cumulative sales monthly .
10. If your sales (with the exclusion of VAT) are but £150,000 consider switching to the flat rate VAT accounting scheme.
Under the flat rate, smaller businesses don't got to calculate the VAT liability from invoices received and issued. Instead they will pay VAT as a flat rate percentage of their sales. this is often sometimes easier to administer and should end in you paying less VAT.
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