It is unfortunate to see that business owners or entrepreneur in UK must notice about the taxes that are climbing higher from time to time. On the other hand, the government holds the debt that hit £950 billion in previous year and this debt is 68% of GDP.
So, many people who run business, especially small business must learn what steps to take to make the tax as efficient as possible, including in the matter of corporation tax, VAT, Annual Investment Allowance, National Insurance, bad debts cut.
Apparently, small business also sometimes has dilemmatic situation when it comes to taxes. Most of business owners are tongues tied when they meet this kind of situation. So, to ease the pain regarding the tax matters, here are some key points that are helpful to reduce the tax burden of many business owners.
The first point is related to pensions. You can make the pension as an alternative to save tax because the National Insurance charges don’t have interest on pension contributions. As a result, the member of personal pension schemes will be able to get tax relief on each contribution.
Neil Pamplin, tax adviser to the g2i investment readiness programmes, stated that one of the main breaks most companies should know about is the accessibility of research and development (R&D) tax relief. He added that tax relief is a low cost, low risk, and easy technique of reducing your tax bill.
To illustrate this situation, let’s say you own a technology or software company, HMRC can give you money back on R&D activity, this way you can deduct up to 150% of qualifying expenditure over particular amount of money, for example £10,000, when measuring profit for tax purposes.
Bryan Wilsher, chief financial officer at creative agency Loewy argued that if particular business is cyclical in its sales in certain circumstances, the business will need to do important step like doing something as simple as selecting an accounting date that meets before its peak profit period. By doing this, there will be no lower tax bill per se, however it comes into the meaning that you keep your tax for another year.
Wilsher’s statement is delivered concerning the point that you will need to reduce tax by easing the cash flow and his statement is a measurement you can use to make sure that your business can hold onto its tax money for longer period of time.