1.Assess Your Service Costs
Often, we get comfortable with our personal insurance providers, banking institutions, and utility companies, largely because shifting seems daunting and researching alternatives is time-consuming. This behavior frequently spills over into our business practices. However, the chances are you can secure similar services at a lower price simply by comparison shopping.
Consider the recurring costs in your business – utilities, internet services, telephone, storage, printing services, insurance, web design, and even accounting services. You might find that your current suppliers are willing to offer a discount if you express your intent to find cheaper alternatives.
Regrettably, some costs, like energy prices, have escalated significantly for businesses over the past year and are largely out of our control. Government support for businesses hasn't been as substantial as it has for individuals.
2.Avoid HMRC Penalties
In the recent past, HMRC has intensified its crackdown on tax evasion and has been strict about enforcing penalties for late filings or payments. Penalties can apply for late submission of your Self Assessment or Corporation Tax return, as well as late tax payments.
If there are errors on your tax return, additional penalties could apply, especially if these errors are seen as careless or fraudulent. As a business owner, the onus is on you to ensure all statutory paperwork is accurately submitted on time.
3.Opt for a Separate Business Savings Account
Over the last decade, the BoE base rate has been at a historic low. However, with the bank rate climbing swiftly, it's time to look beyond zero or negligible interest on your business bank balance.
If your business has excess funds, transferring them to a high-interest-bearing account might be a wise move. Comparing bank accounts can prove beneficial, as interest rates can vary significantly between providers.
4.Leverage Tax Relief
Several businesses are not fully aware of the tax reliefs available to them. A competent accountant should be knowledgeable about your business type and the tax reliefs you can validly claim. These may include Business Asset Disposal Relief, Research and Development Relief, the Enterprise Investment Scheme, and Capital Allowances, among others.
5.Embrace Tax Planning
Strategic tax planning can legally lower your tax liability. A proficient accountant should guide you through this process. Owners of limited companies, in particular, can consider various options, such as dividend payment planning to distribute profits effectively and minimize personal tax liability. Your share capital's structure can also influence your personal tax amount.
Through careful evaluation of your current tax reliefs and potentially transitioning to a different VAT scheme based on your personal circumstances, you can optimize your tax planning efforts.