Top Tax Tips for Business May 10, 2016Views: 887
Following on from our blog last week about ways to save tax on a personal basis, we’re using this week to introduce a few ways you can save tax if you run your own business. This could be a limited company, a sole trader or a partnership, although there are usually slightly different rules for each and we've stated which entity the tip applies to below.
As we mentioned last week, what works for one person may not always work for another, which is why you should seek your own professional advice based on your own individual circumstances before you take any action. However, these tips should give you some interesting food for thought!
Choose the Right Year End – If you’re self employed you will need to prepare accounts each year to enable completion of your tax return. The year end you chose is very important as it will determine how much tax you pay in your first year – anything other than 31st March or 5th April will very likely mean that you’re taxed twice on the same profits, and you will have to wait until you cease trading for relief for that double tax. This doesn’t apply if you’re running a limited company, but is an exceptionally important consideration if you’re self employed or in partnership.
Pre-trading Expenditure – If you bought goods or services before you started trading that you then use in your business you may be able to claim the cost of them against your profits, and even reclaim the VAT in some circumstances. Keep the receipts and check with your adviser.
Mobile Phones – A limited company can provide a mobile to each employee with no benefit in kind implications, provided the contract is in the company name. No matter how much the phone is used personally the whole cost is tax deductible for the company.
Party! – A company can spend up to £150 per person on annual events, whether that’s Christmas parties or Summer BBQ’s. The events do have to be annual, so you have to repeat them each year, and you do need to physically spend the money and keep receipts. There’s no limit on attendees though, so if it’s just you in the company you can have a Christmas dinner for you and your partner for up to £300. Go careful though, 1p over the limit and the whole bill becomes a fully taxable benefit in kind.
Choose the Right VAT Scheme – If you run your own business and you exceed the VAT limit you have to register with HMRC, but make sure you’re taking advantage of the various VAT schemes available. For many smaller companies the VAT Flat Rate Scheme can be beneficial both from a tax and time saving point of view..........
Have a wander over to our websiteto read the rest of our blog and discover more of our tax tips!
Please note that this blog is intended as an overall introduction to the subject matter, and should not be taken to be exhaustive or specific advice. You should discuss your individual personal circumstances with your own professional adviser before taking any action.
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