When we ask clients how they’d like the re:accounts team to help, the most popular answer is… “we want to pay less tax!” Well, that’s great because that what our accountancy service is aimed at… saving our clients time and money whilst helping their businesses to grow.
Are you running an incorporated business? Here are our top tips for helping to minimise the amount of corporation tax you pay to HMRC.
7 Tops Tips to Reduce Corporation Tax
1. Expenses: Size Doesn’t Matter
Make sure that you claim every business expense incurred, regardless of the amount involved. You may feel that a few pounds here and there are not worth the admin time involved – but these items add up! (Parking fees and coffees on the go are the most common culprits.)
2. Consider Adding Owners to the Payroll
Some limited company owners forget to set themselves up as employees. This is especially true if they have alternative income streams, such as share dividends. If you’re a business owner working in your own company, it may be tax-efficient to add yourself to the payroll. We can let you know whether this is the most effective route for you and your company.
3. Choose a Good Accountant!
Save time and stress by handing your accounts and tax requirements to an accountant. We would say that, wouldn’t we?! Seriously though, it makes sense to involve an expert, saving you time and money. Good accountants understand the legal ways to maximise your profit and minimise your corporation tax liability.
4. Pay Into a Pension
Putting money into your pension pot is one of the most tax-efficient steps you can take. It reduces your corporation tax bill and plans for your retirement.
5. Meet HMRC Deadlines
Tax relief usually needs to be claimed within two years of the end of your company’s accounting year end. R&D tax reliefs, capital allowance… are you making the most of these entitlements? Review your options and don’t leave it too late to claim!
6. Working from Home Allowance
This way of working is more common than ever with many businesses sticking with this model instead of returning to business premises. The ‘work from home allowance scheme’ allows businesses to claim a proportion of employees’ additional at-home expenses if they are working remotely. You may be able to claim tax relief for work-related costs such as:
- gas and electricity
- metered water
- business phone calls, including dial-up internet access
7. Time to celebrate!
We saved the best until last… a celebration such as Christmas party can be tax-deductible, with up to £150 per employee offset against corporation tax. Let’s party!
“We love reducing our clients’ tax liability,” says Emily Bridges of re:accounts. ”There are always clever ways and various allowances to explore. It’s great to see how clients are pleasantly surprised when we tell them the amount involved!”
Would you like to minimise the amount of corporation tax your business pays? Enjoy an initial discussion (and a coffee) with the friendly experts at re:accounts without obligation. Let’s talk.