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small business tax tips

Did you know that in the UK, small businesses account for 99.3% of all private sector businesses? That’s a lot of us, right? But here’s the kicker: many of us are paying more tax than we need to. Why? Because we’re not making the most of the tax savings opportunities available to us. So, let’s dive into some small business tax tips that could save us some serious cash.

Small Business Tax Tips: The Basics

First things first, we need to understand the basics. Tax can be a complex beast, but with a bit of knowledge and some careful planning, we can tame it.

Understanding Your Tax Obligations

It’s crucial to know what taxes we need to pay and when they’re due. This includes Corporation Tax, VAT, and National Insurance. We can’t plan for tax savings if we don’t even know what we’re supposed to be paying. Check out the HMRC website for more information.

The Importance of Accurate Record-Keeping

Good record-keeping is essential for tax compliance and can help us identify potential tax savings. It’s not just about keeping a pile of receipts in a shoebox. We need to keep track of all our income and expenses, and make sure we can back up everything we claim.

Getting Professional Advice

Tax can be complicated, and getting it wrong can be costly. It’s often worth getting advice from a professional accountant. They can help us understand our tax obligations, plan for tax savings, and make sure we’re compliant with all the rules and regulations. We offer a range of accountancy services that can help.

Deductions: Your Best Friend for Tax Savings

Deductions can be a real game-changer when it comes to reducing our tax bill. Essentially, they’re expenses that we can subtract from our taxable income, reducing the amount of tax we have to pay.

Office Expenses

If we’re running a business from home, we might be able to claim a portion of our household expenses, like heating, electricity, and internet costs. It’s not a free-for-all, though. We need to make sure we’re only claiming for the part of our expenses that relates to our business.

Travel Expenses

If we’re travelling for business, we can usually deduct the cost. This includes things like fuel, train tickets, and even hotel stays if we’re away overnight. But remember, it has to be business travel. That trip to the seaside with the family? Sorry, that’s not deductible.

Staff Costs

If we employ staff, we can usually deduct their wages, as well as other costs like pension contributions and training expenses. But again, we need to make sure we’re keeping accurate records. That way, if HMRC ever wants to check our figures, we’ve got all the evidence we need.

Tax Planning: A Year-Round Activity

Tax planning isn’t something we should only think about at the end of the tax year. It’s a year-round activity that can help us maximise our tax savings.

Making the Most of Allowances and Reliefs

There are various allowances and reliefs available that can reduce our tax bill. For example, the Annual Investment Allowance lets us deduct the full cost of certain assets from our profits before tax. It’s like a gift from the taxman, and we should make sure we’re making the most of it.

Considering the Timing of Income and Expenses

Sometimes, it can be beneficial to delay income or bring forward expenses, especially if it could mean paying a lower rate of tax. For example, if we’re close to the threshold for a higher tax band, it might be worth delaying some income until the next tax year. But remember, we need to make sure we’re doing this for the right reasons, not just to avoid tax.

Planning for the Future

If we’re thinking of selling our business or retiring, it’s worth planning ahead to minimise our tax liability. There are various reliefs and allowances available that can reduce the amount of tax we have to pay when we sell our business. Our exit planning services can help with this.

Record-Keeping: The Key to Tax Compliance

We’ve mentioned record-keeping a few times already, and that’s because it’s so important. Good record-keeping is essential for tax compliance, and it can also help us identify potential tax savings.

Keeping Records of All Income and Expenses

This includes sales invoices, purchase receipts, bank statements, and any other documents that show our income and expenses. It’s not just about keeping a pile of receipts in a shoebox. We need to keep track of all our income and expenses, and make sure we can back up everything we claim.

Storing Records Securely

We need to keep our records for at least six years, in case HMRC ever wants to check them. It’s a good idea to store them securely, either in a safe place or digitally. That way, if we ever need to refer back to them, we know exactly where they are.

Considering Using Accounting Software

Accounting software can make record-keeping much easier, and it can also help us track our income and expenses in real time. It’s like having a personal accountant in our pocket. We offer online accounting services that can help with this.

Small Business Tax Tips for Lancashire Businesses

So, there we have it. Some essential small business tax tips that could save us a bundle. Remember, tax doesn’t have to be a headache. With a bit of knowledge, some careful planning, and good record-keeping, we can make sure we’re paying the right amount of tax and not a penny more.

And if we’re ever unsure, it’s always worth getting professional advice. After all, we’re not just business owners. We’re part of the backbone of the Lancashire economy, and we deserve to keep as much of our hard-earned money as possible.

So, let’s make the most of these tax tips, and let’s keep Lancashire’s small businesses thriving.

Small Business Tax Tips – Frequently Asked Questions(FAQ)


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