To help you trim the company budget and save money, this week Axis for Business reveals how to reduce small business taxes.
Keep Your Expenses in Check
At Axis for Business, our goal is to help small businesses across the UK make real savings as an independent energy and telecoms provider, by offering value for money.
That goal extends to helping small businesses make the cost cuts they need to keep their expenses in check, and thus remain profitable. One of the major areas any business can do so is taxes. However, because you are dealing with legally required payments, you need to be careful when you decide to look at how to reduce taxes for your small business.
Five Tips for Reducing Small Business Taxes
As luck would have it, Axis for Business is an expert in this area, so if you want to do so the right way, here are five tips you can use to reduce taxes for your small business…
Keep Track of Expenses: Under UK law, there are certain expenses that you can offset against your taxes i.e. the cost of running a mobile phone, business travel expenses etc. Keep track of them and submit evidence of them with your tax return to lower the amount of tax you have to pay.
Use the Annual Investment Allowance: The Annual Investment Allowance is a 100% allowance made for tools and equipment for your business up to a capped amount. Anything spent within this allowance (£500,000 to 31st December 2015, then goes back to £25,000) can be written off against taxable profits for the period in question.
Withdraw the Allotted Amount: UK law says that the director of a limited company may withdraw a certain amount every year without being subject to additional income tax or national insurance. Use this allowance to trim the overall cost of tax.
Take Advantage of Being a Sole Trader: If you are a sole trader, there’s a tax benefit open to you, that isn’t open to bigger companies. You can claim any profits for items used in your business even if you bought them before you started trading. Do so and bring down the cost of tax.
Avoid Automatic Penalties: You absolutely have to file your tax return on time. If you don’t you can be the most tax efficient company in the world, you’ll still end up paying an exorbitant amount. Why? Automatic penalties are charged to any company who files their tax returns late.
Ensure Your Small Business Remains Successful
It’s always important to remember that the government values small businesses as a driver of the economy. In other words, there is always a way to cut down the amount of tax your company is liable to pay, and generate the extra cash you can then use to ensure your small business remains success.