As the financial year comes/draws to an end, you may want to start wrapping up loose ends. Planning finances at the end of the year is not just about getting a reduction in the tax bill but also about managing finances all year round so that your business remains efficient. Needless to say, tax planning for high earners and smaller businesses holds equal importance.
Tax Planning in the UK: Strategies for an Optimal Future
Financial planning requires concentrated efforts and a robust knowledge regarding the business, the economy, and the laws around it. Tax-efficient strategies often encourage growth, reinvestment, and participation in schemes. Here are some key strategies that we can help you with:
Reviewing and Claiming Allowable Deductions—Our team of tax experts in the UK will review your expenses in detail and help you identify any missed deductions, namely office supplies, travel costs, marketing expenses, subscriptions, or other expenses.
Using Capital Allowances – Claim allowances for tax relief on certain capital expenses that include assets like machines, vehicles, equipment, etc. Use your Annual Investment Allowance (AIA) to deduct the full value of up to £1 million from taxable profits. You can also check out the Super Deduction clause, which allows you to claim a 130% reduction in your corporation tax.
Optimising Your Timing – Managing the timing of income and expenses is one of the effective tax planning strategies. In case of anticipated higher profits, they could be deferred to the next financial year with proper guidance and handholding by our expert team.
Utilising R&D Tax Relief – Our proficient team can identify and document all the qualified aspects by thoroughly reviewing your projects. Work with a tax specialist to get maximum benefits. Small and medium-sized enterprises (SMEs) can look towards claiming a deduction of up to 230% of qualifying R&D costs. Large companies or those not qualifying for SME relief can try to get a tax credit equal to 13% of qualifying R&D expenditure.
Employee Bonuses and Shares – Optimize tax planning strategies for retirement bonuses, pensions or other employee benefits. Not only this, but you can also offer your employees the chance to buy company shares. This can make a portion of company profits eligible for tax relief and incentivise staff.
Considering Charity and Donations—You can drastically reduce your tax bill and, at the same time, better your business’s reputation by making these donations. Donations to registered charities are deductible from taxable profits, reducing the overall tax amount and giving you an opportunity to earn goodwill.
Patent Box – If your company receives any income from patented inventions, you can apply for the Patent Box regime. This can reduce your corporation tax to 10% of any profit from those patented products.
Enterprise Investment Scheme—We can also help your company attract individual investors with the EIS scheme. Private investors can reduce their income tax amounts by investing in your company, which can, in turn, boost your company’s growth. Even Venture Capital Trust schemes offer tax relief on investments while attracting more funds.
Loss Carry-Forward and Carry-Back – We can help you offset previous and future profits against any current losses. Depending on the relevant laws, losses can be carried back up to 1 year or taken forward indefinitely. This reduces overall taxable profits.
Creative Sector Tax Reliefs—If your company is based in the creative sector such as films, production houses, video gaming, or animation, there is a chance your company might qualify for additional tax reliefs under UK law.
Investment in Startups (SEIS) – Investing in startups that qualify for the Seed Enterprise Investment Scheme (SEIS) also offers significant tax advantages, including capital gains deferral and income tax reliefs for individual investors.
Plan Ahead and Maximize Savings With Us
Taking into account the HMRC tax strategy guidance and other relevant knowledge about effective planning, we optimise your year-end strategies. We will guide you through the complex tax laws in the UK and ensure that not only does your business follow the HMRC rules, but it also saves money and resources. Start optimising your business with helpful taxation strategies!
