Top 6 Tax Tips

top tax tipsBelow are a few quick top tax tips for your business from our tax consultant.

Most Appropriate Structure: Sole Trader, Partnership Or Ltd Company

Companies generally have tax advantages once they are profitable, profits over £50,000 can save tax and NI of over £4,000 if you take most of your earnings as dividends. However, if you have losses in your early years you may wish to set these off against other income if you trade as a sole trader or partnership.

Avoid Penalty Charges

Don’t incur pointless penalties; register your new business with HMRC by completing form SE immediately. Also, ensure you return all tax returns, statutory accounts and any other required company returns in plenty of time to HMRC and Companies House to avoid penalty charges.

Don’t Forget To Register For Vat In Time

As soon as your turnover reaches £73,000 for the last 12 months it is compulsory to register, penalties can be high so make sure you register. Also, consider whether it may be worthwhile registering voluntarily before reaching the compulsory threshold, by reviewing your cash flow forecast, perhaps with your accountant you can assess whether it may be beneficial to register early.

Register For Flat Vat Scheme If You Are A Small Business

If your turnover is less than £150,000 a year you may opt for the flat rate scheme, the VAT you pay is calculated by multiplying your gross sales by a flat rate determined by the business sector your work in.

Drive A Company Van Rather Than A Car To Save Tax

The income tax charge can be much less than for many large cars. Although the taxable benefit for driving a van is £3,000, this can be avoided if the van is only used for ordinary commuting and not for significant personal use.

Record All Your Expenses

Ensure that you record and claim for all your business expenses that you incur, such as mileage, postage, parking, over a few years these can be a considerable cost and these could all reduce your tax liabilities.

2016-10-23T17:20:02+00:00 December 12th, 2011|Tax|0 Comments

About the Author:

Nicky Larkin
Nicky Goringe Larkin is a Chartered Management Accountant who founded Goringe Accountants Ltd. - British Accountancy Awards 2013 Runners Up and awarded 'Highly Commended' accolade. Nicky is also Chair of the regional Federation of Small Businesses (FSB) as she is passionate about ensuring that Small Business issues are heard at the local and national level.