The Shrewsbury Accountants Blog – Taxassist Accountants in Sundorne

For most businesses,  March is a vital time for business tax-planning to get things in place before the financial year end. Here is a list of our top tips:

1. If you intend to purchase assets for use in your business (excluding motor cars but including vans), you should consider buying (not leasing), these assets before your year-end to reduce this years taxable profit. But be careful not to let the “tax tail” wag the dog.
2. Similarly, for normal ongoing expenditure (e.g. repairs, professional fees and advertising), costs incurred before the end of the year will reduce the current years tax liability. However, this does not apply to stock items.
3. Any staff bonuses that you pay prior to the end of your year will reduce your tax for the year. We can advise on minimising the national insurance cost of these bonuses.
4. We can also reserve for a bonus in your accounts to qualify for tax relief this year, provided the bonus is actually paid within 9 months of the end of the year. We can also reduce your taxable profit by including staff holiday pay earned but not yet paid.
5. If your spouse/civil partner/children over 13 work for the business, it is tax-efficient to pay a salary of £590 per month (£624 per month after 5^th April, 2012) or maybe more, if they do not have other income (sole traders and partnerships not limited companies).
6. Is there scope for salary sacrifice schemes benefitting you and your employees?
7. If your sales in the year included unpaid sales that you consider will not be paid, we can make a provision to reduce your taxable profit by this figure. Don’t forget that you can recover the VAT on bad debts from HMR&C.
8. If you have stock that you are unlikely to sell, we can write down the value to the likely selling price, instead of continuing to value at cost. This will reduce your taxable profits.
9. Can any borrowings be restructured to maximise tax-relief.
10. Have you considered changing to a limited company, we can give you a free-estimate of the likely tax-savings. (sole traders and partnerships only).
11. Have you considered making a payment into a personal pension scheme?
12. Do you need to start planning for the sale of your business?

For limited companies only

1. If your spouse/civil partner/children over 13 work for the business, it is tax-efficient to pay a salary equal to their unused personal tax allowance.
2. Has the company considered making a payment into a personal pension scheme.
3. Have you taken the tax-efficient salary and dividend package? Are dividends properly documented?
4. Will the year-end snapshot show the best possible picture of the company’s finances? This can improve the company’s credit-rating.

Please take advantage of our business health check which is available here. 2MinuteHealthcheck

If you need any further help. Please contact us.