The top tips to ensure that you take full advantage of tax reliefs that should reduce your tax at year-end shall be examined. Strategic planning in advance will guarantee that you do not lose out by paying a larger tax amount. Advice form a Professional Accountant should be sought to help you plan your year-end accounts.
Changes to Dividend Tax
Change to dividend tax will allow you to take a dividend up to £5,000 without being taxed. Any amount over £5,000 will incur a tax increase of 7.5 percent which is the reason that you should consider other options. By investing in an ISA with a new personal allowance of £20,000 a year is a good alternative.
Selling a Business using Entrepreneur Relief
Profits from selling your business can be best maintained by using entrepreneur relief. This relief has certain stipulations and a professional accountant should be consulted for this type of relief.
Efficient use of Capital Allowance
Capital Allowance is an efficient method to decrease your tax bill for your business. The following capital assets for a business can be claimed. They can be capital assets such as heavy duty equipment, IT equipment, fixtures & furnishings and company cars.
Research and Development Relief
Research and Development Relief is available when your company invests in research and development and can be declared as a tax deduction or as a cash payment from HMRC.
By reinvesting the money that you have made from the sale of a business asset you can reduce the amount owed on the original sale. The same rule also applies when you sell your business.
Tax Relief from Social Investment
Tax relief from investment into social projects has been boosted recently. You will receive a 30 percent tax relief from such investments. Thus, you can decrease any amount of tax owed this way.
Business funds for start-ups, new small businesses, research and development and scaling up resources are available from many different sources. Your business may be able to get some funding to help company growth so it is best to explore all your options.
Shoaib Aslam is the co-founder of Pearl Chartered Accountants, a UK-based chartered accountancy firm that has multiple locations across London. They are experts in helping startups and established businesses with all aspects of growth, strategy, scaling up, accounting and tax planning.