Are you paying more tax than you need to?
Take a look at our tax busting checklist to see if there is anything you could do to reduce your tax bill.
- It is worthwhile getting advice about the potential tax relief that may be available, to utilise any "overlap relief" that may have been created when a sole trader or partnership first commenced business.
- It is essential that you obtain advice from the outset of any business regarding its structure - there may be an advantage in considering trading under the auspices of a Limited Company or even a Limited Liability Partnership as opposed to a Sole Trader - only a detailed discussion with you will determine the preferred option.
- Make sure that any losses are properly claimed and offset against other income using the correct loss relief legislation, this can be complex but a proper discussion will determine the correct treatment available to you.
- If your business is operated through a Limited Company, ensure you seek advice as to the most appropriate way of extracting your own income to minimise your own taxation liabilities, often a mix of dividends, and salary can be beneficial.
- Where a Limited Company makes payments of dividends, it is essential that proper paperwork is drawn up at the time of payment - this includes the issue of Board Minutes and Dividend Vouchers at the time of payment and by doing so, reduces the chance of HMRC treating dividends as being paid as something else which, in this case, would increase the taxation liabilities.
- It is well worth taking advice where a property is owned, as to whether is better to own it personally, or whether the Company should own it.
- It is vital that advice is sought where a business employs other "self employed" individuals so that their status is correct, failure to get this right can lead to substantial, unexpected, HMRC liabilities.
- Advice should be obtained about when to register for VAT. From 2014, the threshold at which registration is mandatory is £81,000. In order to ascertain when the effective registration date is relevant, this can only be done by keeping a proper record of sales in any 12 month period on what is known as a "rolling basis". Get it wrong and penalties are charged on top of the VAT that should have been charged.
- Smaller businesses can opt to use the Flat Rate Scheme for VAT - if your business turnover is £150,000 pa or less, adopting this scheme can save you money but again, there are pitfalls so a discussion with us can help guide you through the regulations.
- For all businesses, whatever their size or structure, maintaining good accurate records is absolutely essential in order to minimise time and costs should any of HMRC departments subject you to an Enquiry. We can assist in pointing you in the right direction as to the choice, and method, of bookkeeping.