Whether you’re a seasoned entrepreneur looking for your next challenge, or this is the first time you’ve traded as a start-up, when you begin a new venture you should waste no time in looking into ways in which you can save money on your tax bill at every step of the way.
Below we’ve complied five of our best tax saving tips for entrepreneurs. This list is perfect to get your new venture started on the right foot:
1) Keep Track of Your Expenses
There are few tax saving tips that will benefit entrepreneurs more in the long run than keeping track of your expenses from the very beginning (and your employees, should you have any). If you don’t keep track of your expenses from day one you’re only cheating yourself, as any expenses you fail to claim for will come directly out of your pocket.
Keep in mind that you can also claim for pre-trading expenses from up to seven years before you started your new venture, so long as the expenses are wholly and exclusively for the purpose of your new venture.
2) Gain Financing Through the SEIS
Launched in April 2012, the Seed Enterprise Investment Scheme (SEIS) makes it easy for start-ups to gain financing by encouraging individuals to support new ventures and small businesses by handing them significant tax savings in exchange for their investment.
Your start-up may also be able to benefit from the Enterprise Investment Scheme (EIS), which, though older, offers similar tax saving tips for entrepreneurs and investors alike.
3) Check if You Qualify for Research and Development Relief
If your new start-up is already paying Corporation Tax, you may be able to qualify for Research and Development Relief should you currently be undertaking qualifying revenue expenditure in a Research and Development (R&D) project that’s directly related to your start-up’s trade, or an area of trade which you’re considering expanding into.
Though it’ll never be your intention, if you make a loss during a tax year in which you’re claiming Research and Development Relief you’ll be given tax credits rather than Corporation Tax relief, credits which you can use in upcoming tax years.
4) Consider the Flat Rate Scheme for VAT
While not an obvious tax saving tip, the Flat Rate Scheme for Value Added Tax (VAT) can dramatically simplify the accounting process for your start-up while it grows.
Instead of having to write down the amount of VAT charged on every sale or purchase you make, when you opt to work under the flat rate scheme you won’t need to keep track of these figures, with you paying a flat rate of 4-14.5% overall VAT, depending on your start-up’s sector.
5) Meet With an Accountant
You don’t need to hire them, at least not right away, but meeting with a qualified, experienced accountant when you’re beginning a new venture will allow you to understand the importance of having your finances in order from the moment you start trading. You never know, they may even supply some tax saving tips on the house!
To speak with a professional accountant to discuss how you can save money on your tax bill with your new start-up, or for any other questions, contact us today on 020 8780 2349 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.