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Actionable Ways to Save on Your Business Taxes


Saving money on your business taxes has got to be a top priority for all SMEs; after all, becoming a wealthy entrepreneur is much easier when you know what you can and can’t do legally. Tax advisors North Wales can help to make your business taxes much more efficient and smooth running. Here are some legal small business tax saving tactics you can use for your own SME, North Wales accountants can help with all your business tax requirements.

#1- Take money out of your business in the most tax-efficient way

If you are a limited company, it makes sense to take money out via a combination of salary and dividends; there are also other tax-efficient strategies to explore to maximise your business tax savings.

#2 – Consider paying class 2 National Insurance contributions 

If your business profits fall below the small earnings exception (£6,025 in 2019), you can be exempt from paying class 2 National Insurance contributions. Or you may wish to keep up with the contributions to build up your entitlement to a State Pension. 

#3 – Make key employees partners

If you are a sole trader or a partnership, consider making your key employees partners – it can help you to make significant National Insurance savings for both you and key individuals, whilst also tying them into the business.

#4 – If you’re self-employed, make sure the Taxman knows it!

A one-man band business (not a limited company), might consider themselves to be self-employed, but they should give the Taxman no chance to charge them more on the basis that they have been employed by one or more of their best customers. 

#5 – Plan ahead

Planning ahead to minimise your tax bill when you sell your business should help to keep more money in your pocket. With proper planning you can make sure that the Taxman can’t take up to 59% of everything your business is worth. 

#6 – Maximise capital allowances that can be claimed

Extra tax relief on the features within the business property might be possible, even if the property was bought many years ago. Conducting a detailed and thorough review could result in significant tax savings, and possibly even a tax refund. 

#7 – Employees using their own cars for company business

Employers can pay their staff up to 45p per business mile tax free, dropping to 25p per mile after 10,000 business miles for cars used on business journeys. Where employees receive less than these limits for business journeys in their own cars, they can claim the difference as a deduction against their wages and reduce their tax bill. 

#8 – Make the most of all the tax-free benefits in kind for your staff

These benefits in kind include:

  • Health checks
  • Paying relocation expenses
  • Car parking
  • Sporting and recreational facilities
  • Providing workplace nurseries and crèches
  • Subsidising certain forms of transport to and from work – including bus fares
  • Providing mobile phones (no more than one per employee)
  • Allowing staff to use pool cars for business purposes
  • Providing company bicycles

#9 – Consider whether your business would be better off as a sole trader, partnership, LTD or limited liability partnership

For some businesses, the scales may have tipped in favour of becoming a company, but for some others it might be better to go back to being a sole trader or partnership. Limited liability partnerships might be a better choice than either of these options for some businesses. 

 

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