4 Do It Yourself Tax Tips
There are a number of ways you can legally minimize your tax bill with some planning. Below is the list of easy tax saving tips that you can exercise for your business. These steps you can follow without paying for a accountant or tax adviser.
Tip 1: Director Payroll Processing
If you are director/s of a company and not elsewhere employed, you can run a tax free salary up-to personal allowance level for yourself. This will benefit you with a straight 20% relief on the corporation tax. As the minimum tax free figure for salary income changes every year, you update your pay accordingly. For current tax threshold, click here.
Tip 2: Salary-Dividend Tax Efficient Combination and Timing
HMRC taxes dividends based on the declaration or payout date, whichever comes earlier. For a close company with few directors, you can defer the dividend declaration date. If the total of your salary and dividend crosses the basic rate threshold. This saves a significant amount of tax you would pay otherwise by exceeding the basic rate band
Tip 3: VAT Flat Rate Option
If you a business with not much input VAT, you might be missing thousands of pounds in your VAT by not considering the FRS scheme. The businesses that can have obvious benefit from FRS are consulting firms, IT Companies and other service rendering businesses. For detailed guidance on FRS, click here.
Tip 4: Capital Allowances and AIA
There are a number of qualifying fixed asset purchases which the businesses can claim as capital allowances and you might not be claiming this. For some qualifying assets, you can claim a 100% (subject to upper limit) as Annual Investment Allowance which has the same effect as claiming expenses or purchases. This can save you a lot in taxes.
Any confusion on the tax tips above, why not call us for a free telephone discussion to discuss your tax affairs thoroughly.
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