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Tax Busters - is your business tax efficient?

In business, it is important to make your business’s money stretch as far as possible. One good way of doing this is by becoming tax efficient.

If we handle your accounts for you, we will always do our best to make sure your business remains tax efficient. If you’re doing it yourself, here are some pointers to help you make your business as tax efficient as possible.

Home Office

Many people who run their business from home are unaware that a proportion of their expenses e.g. heating, lighting, telephone can be claimed against their business income.

Keep abreast of Government Incentives

The Government is always coming up with incentives schemes that allow small businesses to save money. For instance, if you file your payroll accounts with HM Revenue & Customs online, and you can claim an incentive rebate of £250 in the first year – and up to £525 over four years.

Expenses

Ensure that you reclaim any expenses that you have made which are direct expenses of the company, e.g. mileage for a journey made for business reasons, meals whilst away, hotels, postage and so on.

VAT

If you register for VAT, you can reclaim all of the VAT back on purchases. You must register for VAT if your turnover limit exceeds £61,000, but you do not have to go over this limit to register: there are often benefits for smaller businesses.

If you are registered for VAT, there are now three different ways to pay your VAT bill. For information on these schemes, click here.

Choosing the right scheme can save money and hassle, and improve the cashflow of your business.

Paying your spouse

If your spouse is assisting in some of the business tasks, it may be advantage to pay them a wage, this assists in paying less tax as they will also have a personal allowance.

Payroll Giving

If you want to donate to charity on a regular basis, payroll giving is a tax effective way of doing it. Your donation is deducted from your pay before tax, the donation is then paid to an approved Payroll giving agency, and they then distribute the money to the charities which have been chosen.

Childcare

The Government have introduced an incentive to help employees with childcare. Each employee is entitled to £55 per week (tax and NI free) to go towards registered childcare. This amount can either be done as a voucher or directly through a third party e.g. childminder or nursery. If this is done as part of a ‘salary sacrifice’ scheme, it effectively means the employee pays for their child’s care from their gross salary rather than net.

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