When you’re first starting out in business, it’s essential that you focus as much of your energy as possible on maximising your start-up’s potential. Your time is valuable, and there are better places to spend it than on time-consuming tax issues.
This is why hiring a specialist tax accountant from Tax Agility is so important – we can ensure you’re saving as much money and time as possible, and we also provide you with valuable business information gained from years of experience. Here are some tax-saving tips you can apply to your business.
Know your industry
Knowing your industry inside out is not just good for business, it can also save you money on your taxes. If you keep yourself engaged in what’s going on in your industry, you’ll be the first to know of any new reliefs or allowances approved by HM Revenue and Customs (HMRC). For example, if you’re in the construction industry, knowing how the Construction Industry Scheme (CIS) works is beneficial. If in doubt, check with an accountant specialises in your industry.
Check if you’re eligible for Seed Enterprise Investment Scheme (SEIS)
SEIS is a scheme that offers tax relief to those individual investors that buy shares in new companies. Though you’ll have to give a small chunk of your start-up away in exchange for their investment(s), it can’t hurt to check if you’re eligible. You can receive up to £150,000 of tax-free investment, but unless your company follows the rules laid out on the government web page your investors will not be able to claim the tax relief.
Choose the right business structure
You can start saving on your tax bill in the first month of your start-up’s life if you choose a business structure that’s appropriate to your start-up. Certain structures can allow you to adjust your earnings to avoid certain taxes – for example, if you set yourself up as the director of a limited company, then you can pay yourself in dividends, which you do not have to pay National Insurance Contributions on.
The Making Tax Digital (MTD) scheme is also fast approaching. From 1 April 2019, VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000 are required to use the MTD service to keep records digitally, plus also use software to submit their VAT returns from 1 April 2019. If you haven’t made the switch and chosen a system that can integrate with online accounting easily, then it’s time to talk to an accountant with experience in cloud accounting to find out more.
Work from home
One way to maximise your start-up’s potential when you’re just starting out is to work from home, as you can save money on expensive office rental fees. At the moment, HMRC allows you to claim £4 a week to cover fixed expenses. In addition, you can also claim tax relief for other expenses like telephone calls and electricity for your work area. However, it must be said that you cannot claim things that are used for both private and business, such as rent or broadband access. To find out more about how much household expenses can be reimbursed, visit this EIM01476 page.
Hire an accountant
It can be tempting to try and save money by doing your taxes yourself. However tax laws are complex, and you need a professional to ensure you’re saving as much as possible, within the permitted law. The sooner you hire an accountant, the sooner they can get to work ensuring you’ll only be paying the tax you’re liable to pay.
Chartered accountants for small businesses
At Tax Agility, we are chartered accountants for small businesses including start-ups. One area we specialise in is business tax for small businesses, where we can show you which tax reliefs you can apply for and any expenses you can claim, potentially saving you thousands of pounds worth of tax.
If you’d like to know more about tax saving tips for your start-ups or small business, contact us today on 020 8108 0090 or get in touch with us via our contact page to arrange a complimentary, no obligation meeting.
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