If you are the owner of a company I am sure you are continuously looking for ways in which you can get some tax savings. Hey, who wouldn’t be happy if they could save some money in the tax department?
Luckily there are legal ways through which your company can pay less tax.
By reading this article we’d like to encourage you to explore and enquire tax saving opportunities. If you are uncertain, or if you were wondering how to go about tax savings, it is always a good idea to contact a registered tax practitioner.
But for starters, this article provides five tip-top tips that will guide your company along the path of tax savings – the right way of course.
Long Put Off Expenditures
Every company has long put off expenditures like an office interior redesign, office repairs, advertising etc. Don’t put it off any longer, because any expenditure before the end of the financial year will reduce the current year’s tax liabilities. So start with those long put-off expenditures and start capitalising on tax savings.
Save tax money by bringing forward capital expenditures such as machinery, especially energy saving technologies and products that qualify for a 100% allowance. When it comes to plant and machinery related expenses most companies receive a 25% allowance and SMEs 40% in their first year of trade.
And if you purchase computing and telephone equipment during your first year of trading you can claim 100% reduction against your profits for that year.
The new R&D tax credit also allows R&D companies to claim 150% of their expenditure. Also, if you made a loss you can take part of the claim as an immediate cash payment. But it is advisable to contact a professional tax practitioner to find out if you qualify as R&D COMPANY.
Restructure Dividends and Bonuses
If you are a small business owner/manager, you can save on national insurance payments by taking dividends instead of drawing a salary.
Minimise Capital Gains Costs
You can minimise your capital gain costs by taking the proceeds of a sale and reinvent them by purchasing a replacement asset. However it is advisable to get professional advice as not all assets qualify for tax relief.
It is critical that when employees make purchases on behalf of the company they ask for VAT receipts, that is if the vendor or service provider is VAT registered of course. This way you can claim back VAT on all purchases made for the company.
It is very important to ensure your company’s tax affairs are well organised and constructed. It is a good habit to review your company’s tax affairs at least two to three months before the end of the financial year. This way you stand a better chance of increasing your company tax savings.
If you are uncertain where and how you can obtain tax savings, contact us today for advice.