Many business owners view taxes as a significant burden. However, businesses all over the UK are overpaying their taxes every year. They don’t use the entire arsenal of tax relief options available. Here are some tips to ensure that you are not losing the money you could be investing in your business instead of paying tax.
Always Have Professional Help
One of the first things you should do is get professional help with your taxes. Professional accountants in Central London from gsmaccountants.co.uk are worth their weight in gold. They can plan out your entire tax strategy for a reasonable fee. Contact them near the end of the tax year, and they will ask you about projected expenses and earnings. Their team can then present you with a plan and suggestions on lowering your tax burden and how much to withhold. Then, with a clear tax payment plan, you will not have to pay much or even at all when tax day arrives.
Capital Allowances Are Your Friend
A significant deduction that you will be able to use for your business is capital allowances. When you purchase expensive assets that help your business make money in the UK, you can claim them as deductibles. This rule usually covers heavy machinery like business vehicles, manufacturing equipment, etc. The deduction is equal to most or all of their value. You can even claim gifted equipment or those you owned before starting your business. Deducting their value from your profits significantly lowers your taxable income, lowering your tax bracket. Besides machinery, you can also claim capital allowances for building business structures like offices and factories.
Send Your Books Into The Cloud
Accurate accounting of your expenses and income is vital to make your accountant’s job easier. People kept their files on paper or their computers in the past. However, the risk of data loss can hit your business. It is why moving your accounting software to cloud is effective. You can have accurate data on your cash flow safe while also accessing it quickly. You can even arrange for regular backups. In addition, with your books safe, you will be able to present accurate information when tax season arrives.
Always Claim Your Expenses And Have Proof
Saving receipts and recording expenses may seem like a lot of extra work, but it can save you money during tax season. Expenses like travel and eating out may not seem like tax deductions, but if they were for a business reason like a conference for work, they are legitimate deductions. You can even deduct the cost of uniforms and work tools. Work with your accountant to clear up what can be deductions and use that to your advantage.
It would be best if you weren’t dreading paying your business tax every year. The tips above ensure that you know that you are paying just the right amount during tax season. You can then use the money you save for future improvements to your business for increased profit.