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Effective tax planning is essential if you are to minimise your tax bills. Simple tax planning can significantly reduce your tax liabilities.
The self-assessment tax return is an unavoidable burden if you are liable for self-employed tax or have complicated income tax affairs.
Corporation tax is charged on a company's profits. If you trade as a limited company, ensure that paying this tax is as painless as possible.
National Insurance Contributions (NICs) are payable whether you are self-employed or employed by your own company, although different rates apply.
As well as your legal obligations, you’ll want to ensure that payroll is painless and that you use any opportunities to improve your tax-efficiency.
Effective VAT planning aims to ensure that VAT is relatively painless, and that you are reclaiming as much as possible of the VAT you pay.
Capital gains are made when you sell something for more money than you paid for it. As a result, you can be subject to tax. Take professional advice.
Business property taxes apply to businesses with commercial premises.There are two commercial property taxes: business rates and stamp duty land tax.
If you have tax problems or face a tax investigation, it pays to seek professional advice and you must act rather than just hoping for the best.
Business start-ups rightly focus on how to make money. At the same time, newly formed businesses have an important tax planning opportunity.
Business formation - whether to set up as a company or sole trader, as an example - can make a big difference to your future tax bills.
A start-up has several options when it comes to the legal structure of the new business. The simplest business set up is as a sole trader, while other options include formation as a partnership, limited liability company or limited liability partnership (LLP).
Each way of forming your new business has different tax consequences, as well as other implications, such as the extent of your personal liability for business debts. The date of your business accounting year-end can also affect the level of taxable profits and how long you have to pay any tax due.
Depending on your business set up, you will also want to identify the most tax-efficient way to withdraw profits from your new business, for example, by paying dividends (if you set up a company) or by making tax-efficient pension contributions. A business start-up may also want to consider tax-efficient ways of rewarding and incentivising key employees.
Business start-up financing can also have significant tax implications. Your tax planning should look at the overall tax consequences of your new business financing.
For example, interest payments on loan finance are tax deductible. But if friends or family lend money to your new business, they will be liable to income tax on any interest they receive. Your business start-up tax planning may also need to take into account the tax consequences for any investors, for example, whether they qualify for tax relief on their investments or when they later sell their share of the business.
Your business start-up may involve a number of other tax-planning issues. For example, you will want to ensure that you can set as many pre-start and start up costs against tax as possible (and recover VAT on these costs if you’re VAT registered).
If the new business uses assets you own, you should investigate the most tax-efficient options. This can apply to both physical assets such as premises and intangible assets such as any intellectual property you have developed. If the new business is acquiring substantial premises, there may be opportunities to minimise the stamp duty land tax payable.
Larger business start-ups may need to consider international tax planning, or to assess the pros and cons of business formation as a single company or as several companies within a group.
If you are starting a new business, taking advice on all aspects of business taxation will help ensure you get the business set up the right way from the outset. You can also build this advice into your business plan.