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Tax advice pays for itself

Good tax advice, pays for itself several times over and centres around:

Utilising latest HMRC tax incentive schemes
Sensibly minimising the total tax burden
Avoiding aggressive and risky tax planning schemes

HOW?

1. Get the right structure,
2. Keep up to date with changing tax laws
3. Tailor to your needs

We’ll find you the most appropriate tax savings and increase your after-tax profits

Get your structure right

How you choose to set-up your business must take tax into consideration since the basic legal structure, usually sole trader, limited partnership or limited company will have a major impact on your overall tax burden.

Each of these structures are taxed differently and you need to consider both the size and profitability of your business in addition to your personal income and capital gains from other sources in order to determine what’s best for you.

Since HMRC regularly changes the tax rules what’s optimal one year might not be the best in the following year.

We’ll identify the structure that best suits your needs for overall tax minimisation

Make sure you’re using HMRC tax incentives

The tax system is never neutral and often deliberately favours certain incomes and costs over others.  It is important to stay abreast of the constant changes occurring in these areas and to be able to cope with their complexities

Some of these incentives currently include:

  • Pension contributions
  • Investments in green technology (including electric cars)
  • Converting income into capital gains
  • Choosing operating costs in preference to capital costs
  • Identifying additional, tax deductible costs
  • Investing in R&D

Structure

Sets the tax boundaries

Incentives

Identify tax opportunities

Tailoring

Match opportunities to your circumstances

Specific tax opportunities

There are many opportunities to reduce your tax bill both within the company and at a personal level.

Generally, tax benefits can be secured immediately, by focussing each year on how to sensibly extract cash from your business or you can take longer term measures to reduce future tax bills. 

Additionally, and very specifically, large tax benefits can arise from R&D expenditure and certain Property Allowances, although the nature of these mean that they will not be available for all businesses.

If you want to know what opportunities you’re missing look at our subsidized financial MOT. Alternatively ensure you’re always kept abreast of the latest tax changes by engaging with our financial sounding board service.

Option 1

1. Getting cash out of your business now

Each year, the following areas should be reviewed to ensure payment of the lowest possible tax bill:

  • A sensible mix of salaries and dividends to minimise National Insurance, Corporation Tax and Income taxes
  • An appropriate level of pension contributions (these are super tax efficient, but over the long term, care must be taken on the likely cumulative size of the final pension fund, otherwise some of these benefits can transform into costs)
  • Appropriate claiming of expenses (travel, entertainment, use of own property for business purposes, professional membership fees, phones and certain clothing)
  • Director gifts

At present favourable tax treatment exists for special one-off expenditure on electric cars and bikes

2. Longer term initiatives

When setting up your business (with others), considerable income and capital gains tax benefits can be secured by utilising the Enterprise Investment Scheme (EIS) and Special Enterprise Investment Scheme (SEIS) initiatives.  These even extend to reclaiming income tax that might already have been paid.

Since the top rate tax for capital gains in considerably lower than the highest income tax rate, leaving cash in your business if you don’t need it immediately can make sense.

Do not hesitate to get in touch if you need some general tax advice

Option 2

The basic tax benefit for R&D expenditure is that rather than getting the usual 19% tax relief on such costs, activities classified as R&D get 44% tax relief.  Where a company is loss making, the benefit can be taken as cash albeit at a lower rate.

What might be classified as R&D?

On first reading, the requirements to qualify for R&D may appear daunting.  However, our team knows exactly what’s possible having submitted thousands of such claims.

“R&D takes place where a project attempts to achieve an advance in science or technology”.  This can be tangible (new product or process) or intangible (new knowledge).  What is key is that there exists a level of difficulty or technical uncertainty over whether this new development will work and that finding a solution would not be readily deducible by a competent person.  Whether something will sell commercially (eg due to a lack of demand) is not relevant for R&D claims.  Expenditure on failed technical trials would usually count whilst a financial appraisal of different investment options wouldn’t.

Only specialist R&D knowledge and claims experiences can secure these benefits, but if they don’t qualify or HMRC rejects the claim, then you pay nothing ie No Gain, No Fee

If you think you have incurred R&D expenditure, please contact us now to secure these benefits.

Option 3

If your business operates in a premises which you own and originally purchased from someone else, there’s a good chance that you are entitled to some tax benefits which have yet to be claimed and are typically worth thousands of pounds, in cash, to you. Our team has successfully submitted thousands of these claims.

The key to realising these benefits is to a) identify the value of “embedded fixtures” – electrical and heating systems, kitchens and bathrooms  –  contained within your property and b) confirm that they haven’t previously been claimed for.

Providing the purchase agreement you signed to obtain the property does not explicitly identify and value such assets – via a clause that will be described as a “section 198 election”, we will be able to secure significant tax benefits which would otherwise go to waste.

As a very rough guide, we would expect a £400k property to generate tax savings of about £8k for a limited company and more if the business was a sole trader – all for minimal effort on your part.

Specialist surveying skills are required to identify these benefits, but if they’re too low or HMRC rejects the claim, then you pay nothing ie No Gain, No Fee

There are no risks associated with this approach which is completely legal – unfortunately up to 80% of SMEs are estimated to have failed to claim what they’re entitled to.

If you’re paying at least £1,500 in tax annually and your property has a minimum value of £100,000 please contact us now to secure these benefits.

£10k

Average client tax savings, per initiative

5 times

Client average benefit/cost multiple

80%

SMEs missing out on property tax benefits

Case Studies

Get in touch

A specific problem, a desire to reduce accounting costs or you just want some general financial advice from qualified experts? Then call us NOW

Case Studies

Case Study 01

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Case Study 03

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If you have any questions please get in touch using the contact details below, or using the form and we’ll get in touch with you as soon as possible.