How to Reduce Small Business Taxes

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 31^st 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. 

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Small Businesses Back Small Business Bill

A new survey has shown Axis for Business that small businesses almost unequivocally back the Small Business Bill currently making its way through Parliament.

Government Plays an Inherent Role in Helping Small Businesses Make a Profit

Through providing competitively priced energy and telecoms services to small businesses throughout the UK, Axis for Business strives to help SME’s save money on their bottom line.

As such, we inherently understand the role of government in doing so, as they can provide legal frameworks to promote a more lucrative economy for small businesses to trade in. That is why it comes as no surprise that SME’s are backing the new Small Business Bill currently making its way through Parliament.

95% of SME’s “Emphatically Back the Proposals.”

According to Growth Business, a Key Capital Partners poll of 100 UK SME’s has shown that they almost universally back the Small Business Bill. Specifically, 80% believe the bill will provide greater access to funding. Meanwhile, 95% stated that they “emphatically back the proposals.”

First introduced in June, the Bill is designed to provide SME’s with greater access to the finance they need to expand. It is specifically tailored to do this by building out the availability – in particular the sources – of investment for small businesses.

The Small Business Bill is a Step in the Right Direction

A partner at the firm who conducted the research, Peter Armitage, spoke out on its results and why the bill needs to go ahead. Armitage argued that “SMEs have often struggled with accessing the finance necessary to maximise growth, and up to this point they have received little in the way of assistance from the government.

“However, our results show that the measures in the Small Business Bill are a step in the right direction. With the government now standing firmly behind SMEs, growth continues to be talking point for many businesses.”

Helping Small Businesses Lift Their Bottom Lines

Armitage makes a valid point. The Bill is certainly a step in the right direction and its obvious why SME’s are backing it. It will provide greater access to funds small businesses need to expand, and lift their bottom lines. 

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