It is a fact that tax is going up. So how can you buck the trend? What follows is a summary of business tax advice you as a business person can do to keep the tax dogs at bay (legally):
- Operate as a limited company rather than as a sole trader or a partnership.
- Pension payments can be tax deductible up to £50,000p.a. saving tax at your marginal rate;
- Business equipment gets a 100% first year allowance up to £100,000 (£25,000 after March 2012);
- Cars emitting less than 110g/km attract a 100% first year business tax allowance;
- You can claim £3pw to cover household costs;
- If you register for VAT it is possible to make a profit by using the Flat Rate Scheme.
- Controlling personal income can optimise Working Tax Credits;
- Wages paid to family members can be tax deductible as long as they are reasonable;
- Sometimes a change in Accounting Policies (which are the recognised ways of treating income and expenditure) can produce savings;
- If you buy another business, buying the assets of the business rather than the shares owned by the vendor will usually be more tax-efficient (but less so for the vendor);
- Make sure mobile and broadband contracts are in the company name.
So if you are a couple and have profits of up to £102,650 you can get your tax bill down to £17,700 just by a careful use of salary and dividends. Every little helps as they say.