The worst part of running a business is paying tax
The worst part of running a business is paying tax. Don’t get me wrong, there is nothing wrong with paying what you owe. But, businesses seem to have to pay a lot more tax just because they are a business. Add to that the fact that it is complex and needs a lot of preparation, and that it is one of your biggest expenses, and it becomes clear it is a nuisance.
For the most part, the tax system is always going to be complex and a large part of your yearly expenses. However, it doesn’t have to be as big a part as it is currently. That’s right, you can cut your tax bill, and you can do it without breaking the law. Unless you have a moral obligation, the tips below could save you a fortune and make running a successful business much easier.
Know The Industry
Even though you might think they are against you, the government does make changes that benefit your industry. If there is a lack of growth or if they are trying to promote more businesses, the will make changes to the tax system. As soon as they do, you need to be there to take advantage. The only way to do that is to know your sector inside and out. Although they make the changes, they won’t tell you about them. After all, they are not your guardian angel. It is your duty to know what is going to happen before it happens so that your company can benefit. To quote Francis Bacon, knowledge is power.
Spend More Time On The Business
If you spend more time on your business, you are spending less time on the accounts. How is that beneficial? It is beneficial because it means you have to hire a professional to look after your books. Yes, you might save money on accountancy fees if you don’t have an accountant. But, the flip side is that you probably won’t claim every expense that you can because you don’t have the knowledge. Accountants have years of experience and a wealth of experience, so use it to your benefit. Anyone that was to view Brown Smith Wallace for information today would see that is a matter of seconds. It is important to remember that an accountant is your best friend when it comes to tax.
Talk To Your Accountant
Although most businesses invest in their time and expertise, the rarely trust them. Why they rarely trust them is beyond belief because they pay them to do a job. Why wouldn’t they have their interests at heart when you are paying their mortgage? The result is that there is a breakdown in communication, and that is when hiring an accountant doesn’t pay off. For those of you that want to save money, please don’t let this happen. When you lose contact with your accountant, you lose the ability to stay ahead of the game. You need to stay current in their mind and annoy them to remind them that your relationship is important.
Claim As Much As Possible
If you are naïve, you might think that you can only claim what you think you are allowed. However, the cynical among you will know different. The simple fact is that you can claim for as much as possible because the tax system is so complex. All that will happen is that they will come back and say you are entitled to that expense. It is their job to make sure that you only get what your business is allowed, so make them work. It is worth pointing out that this tactic is only relevant with government schemes. When it comes to your business’s expenses, you can only claim for what you spent in the tax year. Otherwise, they can fit you with a big fine or a jail sentence if they think you were trying to commit fraud.
Keep Your Receipts
No one can help you with your tax is you don’t have the right documents. Your tax receipts are essential if you don’t want to risk a fine or to go to jail. All it takes if for the government to ask to see your records and you will be in a lot of trouble. In fact, it isn’t worth taking the risk, which means it isn’t worth claiming for tax relief. Negate this by keeping every receipt that you think you can claim back through the firm. It is not your accountant’s job to keep your receipts – it is their job to put them in order. They need the hardware before they can begin to do their job.
Invest In Your Employees
Every government on the planet, or most governments, wants to make sure that their people are comfortable in later life. For one thing, they don’t need an OAP epidemic. But, they also want as few people relying on them as possible. That way, they don’t have to spend as much on pensions. To make this happen, governments like to encourage employers and employees to invest in pensions. How do they make paying into a pension encouraging? They make the money tax-free. Your contributions to pensions come from your yearly earnings, which lowers your tax bill. At the end of the day, it is cheaper to match a pension than it is to pay income tax.
Work From Home
There are plenty of people that would love to work from home, but you don’t like the idea. Well, that might change when you realize you can claim back home charge on your tax bill. The overall amount might seem modest, but every little helps with regards to tax. For more information, take a look at the link.
Expand At A Reasonable Rate
Expansion is the key to success for most businesses. They think that the quicker they can grow, they more money they can make. The logic might be true to an extent, but it is flawed. When your firm becomes bigger, you will have to pay more money in tax. You might think that is a good price to pay, but it could cripple your firm.
The best trick is to grow at a steady rate.