The
Tail on the Dog
Tax is the tail on the business
dog. If you don’t make any money, you are
unlikely to be paying much tax.
But that doesn’t mean that tax should be
ignored when making business decisions. Timing
I particular is crucial to getting the best tax
breaks. There are some pretty generous allowances
out there for purchasing capital equipment, particularly
computers and the tax relief available can be brought
forward a year simply by purchasing an item one
day before the year-end rather than one day after.
Claiming for everything
If it’s business related, put in a claim
for it and let the accountant sort out what’s
allowable and what isn’t. If you are a 40%
taxpayer, even claim for all your entertaining
because whilst the company will pay 20% tax on
the cost, you would have suffered 40% tax on the
money you would have needed to pay the cost out
of your own pocket.
Two companies – recipe for disaster
Big decisions should always have the tax implications
considered first. The setting up of a new company
for a particular project may have sound legal motives
but the existence of a new business could increase
the first company’s tax bill even if the
second company makes no profit at all.
In the meantime, in the real world of business,
the profit-making company is probably subsiding
the other company so it is not protected from its
losses anyway. Don’t forget too that there
will be extra accounting work and administration
too.
Don’t let tax rule your business decisions
though. If you make money, you will have a tax
bill, but the important thing is to make sure the
tail wags in the Inland Revenue’s direction
no more than it has to.
Getting the green light on your affairs
With so many tax-planning options available to
you, it is crucial that you get someone to look
at your affairs in total. To help with this, Marlow Associates
have developed a programme of tax planning to ensure
that nothing is overlooked.
The programme designed for owner-managed companies
covers all of the following areas:
- Claiming all the allowable
expenses that are available to your business
- Ensuring you are drawing income in the most
tax-efficient manner
- Assessing your method of
saving for retirement to ensure you are getting
the maximum tax relief
- Reviewing the way you are
treating your car to ensure it is helping to
keep your overall tax liabilities to a minimum
- One-off
tax efficient remuneration solutions for high
profit Companies House
In addition to the green light service, Marlow
Associates offer the “Time to go limited” service
for unincorporated businesses and long-term wealth
planning for those considering or already in retirement.
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