Tax-Saving Tips for Small Business
Posted 26 Jun 16
As a company director, you will be responsible for filing your accounts and paying taxes to HMRC. Although it might seem like a routine, mundane task, it has a massive impact on the overall finances of your business.
Every year a large amount of businesses lose money simply because they overpay their taxes. It is the consequence of lack of knowledge of which expenses can be deducted from their taxes and how to save money when making financial decisions in regards to their business. The simplest and safest way to avoid overpaying your taxes is to hire a professional and experience accountant, who will take the burden of bookkeeping and accounting off you. At Tawanda Accountants we help hundreds of clients understand how taxes work and how they can save themselves a lot of money by following financial strategies created based on their company’s individual situations. If you would like to find out how we can make your business better, contact us today at Tawanda Accountants.
However, apart from hiring an accountant there are other things you can do as a business owner to save money on tax and in this article we will provide you with some of them.
1. Understand your industry
A lot of industries are given special dispensations and allowances approved by the government and HMRC, such as uniform allowances. Make sure you are aware of the support you can get from these government bodies, trade body or association. Sign up to newsletters, attend events and talk to owners of businesses in your industry. Use the support of your trade union. They want to help your business grow.
2. Know your VAT
VAT is one of the major causes why business owners are losing out. Often, they are paying the wrong amount or are not aware of the Flat Rate Scheme, which for some businesses can be a source of profit.
Make sure your VAT rate belongs to the industry you’re trading in. There might be schemes specifically applicable for you.
3. Work from home
Although there are certain issues that you will have to deal with if you decide to work from home, such as distractions and self-discipline or motivation, it can be very economically friendly, which is a great plus especially for a young business. Better even, some of the expenses you make at home can still be tax-deductable, including:
heat and light
landline and phone costs
general household repairs & maintenance
In order to avoid any confusions, make sure to discuss these expenses with your accountant, since only these expenses which are related to your business activity can be deduct. There are also some examples of what can be claimed on the HMRC website.