Tax planning should be an integral part of your overall financial strategy. Tax planning is a proactive and strategic approach to managing your finances. It ensures compliance with the law, minimises tax liabilities and contributes to overall financial stability and success.
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It’s importance extends across personal finances, business operations, and overall financial management. Here are some key reasons why tax planning is important:
We’ve collated our best tips which businesses can implement to potentially save on taxes.
- Optimise Business Structure:
- Choose a business structure that is tax-efficient, whether it’s a sole trader, partnership, or limited company.
- Consider the Flat Rate VAT Scheme for small businesses.
- Claim Business Expenses:
- Ensure accurate recording and claiming of all allowable business expenses to reduce taxable profits.
- Use Annual Investment Allowance:
- Take advantage of the Annual Investment Allowance (AIA) for capital expenditure on plant and machinery.
- Research and Development (R&D) Tax Credits:
- Explore R&D tax credits for eligible research and development activities, which can provide tax relief.
- Employee Benefits:
- Provide tax-efficient employee benefits, such as pensions and share schemes.
- Consider salary sacrifice arrangements for certain benefits.
- VAT Planning:
- Review the VAT scheme your business uses to ensure it is the most tax-efficient.
- Consider the Cash Accounting Scheme for VAT.
- Loss Relief:
- Utilise losses to offset against profits in the same or future accounting periods.
- Consider Group Structures:
- If you have multiple companies, explore group structures for potential tax efficiencies.
- Making Tax Digital (MTD) Compliance:
- Ensure compliance with MTD requirements for VAT and other taxes.
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It’s important to note that tax laws can change, and individual circumstances vary. Therefore, seeking advice from a qualified tax professional is recommended for personalized tax planning strategies.
If you’d like to gain more advice on saving tax please drop us a line at office@cbsltd.org or call our office on 01775 529345.
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