Small Business Saturday Blog

Seven ways you may be able to reduce your tax bill

Friday, December 02 at 13:38Accounting | Small Business | Top Tips

Sensible tax planning is an essential tool in making the most of your finances and helping your business’s profitability. Keeping your tax bill to a minimum is not a matter of aggressive or complex tax schemes, but rather of identifying which of the many tax reliefs and allowances specifically granted by law are available to you.

Jo Nockels, Senior Technical Communications Manager at small business specialists TaxAssist Accountants, shares some tips and advice about how to save on your tax bill. 

1. Review your business structure
How you structure your business can have a significant impact on your annual tax bills. During the early years of a business, it may be advisable to operate as a sole trader or partnership, as profits increase it may be more beneficial to form a limited company. An accountant can help you decide which entity suits your circumstances.

2. Buying equipment
Before buying business premises, machinery or equipment, make sure you seek advice. Up to 100% tax relief could be available but the type of asset, timing and value can affect how much tax relief you can obtain and when.

3. Choose a vehicle that matches your needs
Talk to an accountant before buying a new vehicle for your business. There are lots of considerations such as taxable benefits, VAT, capital allowances and how you claim tax relief for repair and fuel costs.

4. Don't forget to reclaim input VAT on petrol
Do you reimburse employees who use their own vehicles and pay for their own fuel at the HMRC approved mileage rates? If so, then don’t forget to reclaim the VAT applicable to the deemed fuel element of the mileage rate. You will need to ensure each employee submits a valid VAT receipt in support of the claim.

5. Make the most of losses
You may be able to turn your losses around by carrying them forward to set against future profits, or setting them against other income for immediate relief. Your accountant can review loss relief claims to ensure that the losses are used tax-efficiently and eases your cashflow ideally at a time that’s best for your circumstances.

6. Household bills
If you are running your business from home, you can offset some of your household bills such as heating, electricity, council tax and water rates. Even if your use is only minor for bookkeeping for example, HM Revenue & Customs will accept a reasonable estimate provided your claim is modest and reflects your circumstances.

7. Save on your rental income
If you rent out property, you can deduct a range of expenses from your rental income. These include Council Tax, utility costs, service charges and even replacing furnishings.

Choosing an accountant who specialises in small businesses could save you money and provide you and your business with expert advice on many financial issues. For more information about TaxAssist Accountants visit their website

Quick guide to accounting

Wednesday, September 02 at 16:54Accounting | Quick Guide | Small Business | Toolkit | Top Tips

Accounting Tips for Small Businesses


When running or setting up a small business, keeping the books in order is not only important for the growth, but required for a healthy business. To help you learn the ropes, Leaman Mattei Accountants have given us some great starting points. 


Managing cashflow
Forecast your cash flow to identify shortfalls early and build in a contingency

Consider monthly standing orders and direct debits for regular cash flow

Maintain an honest and open relationship with your customers

Establish clear credit control procedures, make sure your customers understand them, and be seen to implement them firmly and consistently

Check credit references before offering credit terms, do not extend credit limits without good reason

Set aside future tax liabilities in a separate deposit account

Working from home
Self-employed
You can claim costs in your accounts that are incurred wholly and exclusively for the purpose of your business. If you don't maintain a separate office, you can claim a reasonable proportion of those household running costs that represent the space and time in which your office operation occupies your home. This includes a proportion of your rent, council tax and water rates. Alternatively, you can make a claim for a fixed rate deduction from your profits.

Employees
You can only claim the additional variable expenses incurred by working at home. These costs amount to the increased energy needed to heat and light your property for longer, and the extra water used if that is metered. You can also claim the cost of business related telephone calls.

Things to consider when starting a new business
Always keep your long-term goals in mind. Running your business more cost-effectively can be achieved only if you have the vision to project your goals into the future

Cash shortages, lack of a solid business plan to guide the business, and steady decreases in profitability are all warning signs that a business is heading towards a potential financial crisis

It is crucial to evaluate your business’ structure and performance before it manifests these danger signals

Improve your profitability by analysing all the aspects of your business


Missed deadlines = penalties + interest
Key dates to remember

Submission of statutory accounts
-> 9 months after the year end

Submission of corporation tax return
-> 12 months after the year end

Submission of VAT returns
-> 1 month and 7 days after the period end

Payment of corporation tax
-> 9 months and 1 day after the year end

Payment of VAT
->BACS 1 month & 7 days after the period end;
->Direct Debit 1 month & 11 days after the period end





A good accountant could save you money and advise you throughout the life cycle of your business on a wide range of issues. For more information on Leaman Mattei visit their website.


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