To help with tax planning for the 2023/24 tax year we are putting together a list of tax saving tips for businesses and taxpayers.
- Personal Pension: Personal Pension is a tax-efficient way to save for retirement. Contributions made to a personal pension are tax-deductible, and the investment returns are tax-free until the funds are withdrawn.
- Enterprise Investment Scheme (EIS): EIS is a tax-saving scheme designed to encourage investment in small and growing companies. Individuals investing in EIS-qualifying companies can claim income tax relief of up to 30% of the amount invested.
- Seed Enterprise Investment Scheme (SEIS): SEIS is a tax-saving scheme similar to EIS, but it is specifically designed for early-stage startups. Investors can claim income tax relief of up to 50% of the amount invested in SEIS-qualifying companies.
- Venture Capital Trust (VCT): VCT is a tax-saving scheme that enables individuals to invest in a portfolio of small and medium-sized companies. VCT investors can claim income tax relief of up to 30% of the amount invested. Additionally, any dividends received from VCTs are tax-free.
- Employing your spouse and children in the business. Give them a proper role and pay them a salary commensurate with the job they do. Very beneficial if your spouse is on a lower tax rate and of course the children will likely be non-taxpayers.
- Take money out of the business in a combination of dividends and salary to maximise tax efficiency. Make sure the tax-free dividend is utilised by your spouse.
- For business owners there are extra perks for running an electric car. Check with your Accountant for comparing leasing vs Buying to see which is most tax efficient for your business.
- Consider making key employees company directors or partners. This can reduce your NI bill and increase key employee loyalty.
- Make sure your business status is the most tax efficient. Your accountant will advise on this. Consider limited company, self-employed or partnership.
- Selling your business. Make sure you tax plan and make sure your accountant gives you sound advice on how best to plan for this. You have worked hard to build your business so you deserve to retain as much profit as possible.
- Flat Rate Vat Scheme. To join the scheme your VAT turnover must be £150,000 or less (excluding VAT), and you must apply to HMRC. Talk to an accountant or tax adviser if you want advice on whether the Flat Rate Scheme is right for you.
- Maximise your capital allowances especially if you own the business property. It is surprising to find that some business owners have not maxed out on the capital allowances that can be claimed.
- Check your R&D status as you may be entitled to R&D tax credits.
- TAX-FREE EMPLOYEE BENEFITS
- Providing company bicycles. Or pay employees up to 20p a mile when they use their personal bicycles for business.
- You are allowed to give one mobile phone to each employee.
- Transport subsidies.
- Providing health club membership.
- Workplace crèches.
- Allowance of £150/year for staff parties.
Contact us for a free consultation and quote.
Tel: 020 7118 4422
Tel: 01242 241998