Of course you do. It's a pretty dumb question, right? No company wants to pay more tax than they absolutely have to - that's a given.
Nevertheless, many companies don't take advantage of the opportunities that are available. Luckily, with some fairly straightforward tax planning, you can significantly reduce your corporate tax this year.
Here are our five top tips that will help reduce your company's tax liability this year:
1) Bring Forward Long Put Off Expenditures :
Bring forward that much overdue direct marketing campaign or office renovation you were considering for next year. Any spending before the year end will reduce the current year's tax bill and, let's be honest, your office will look nicer.
2) Make The Most Of Your Capital Allowances :
You will certainly save your company some tax by bringing capital expenditures - such as machinery - forward. Some of the bigger savings can be found in the purchase of energy saving technologies and products which qualify for a 100% allowance.
Businesses usually receive a 25% allowance on plant and machinery related capital expenses, but SMEs get a 40% allowance in their first year. So, if you are a small or medium sized company (as defined by company law), take advantage and make these types of purchases before the end of your first year of trading.
Even better, for computers and telephone equipment, you can claim a 100% reduction against your profits in the first year.
The best bet of all is in research and development - a new R&D tax credit means you can claim 150% of what you spend, and if you are a loss-making company you have the option of taking a part of that as an immediate cash payment.
This is a little known and often misunderstood tax credit, but many companies can take advantage of it. Get some advice on what exactly qualifies as research and development first, just to be on the safe side.
3) Re-structure Your Dividends and Bonuses:
Smaller companies - in particular, owner-managed businesses, can save on National Insurance payments by taking dividends rather than paying themselves a salary. On average for a higher rate tax payer, the tax rate will be reduced to around 39% compared to 47%.
4) Minimize Capital Gains Costs:
One of the best ways to minimize capital gains is to reinvest the proceeds of a sale into buying a replacement asset. Be warned, though, that not all assets qualify for relief. Check first before utilizing this tip.
5) Get The Right Receipts
A useful tip is to make certain that your employees ask for VAT receipts whenever they make a purchase on behalf of the company. That will ensure you can claim back the VAT on all purchases that are VAT rated.
If your company reviews it's tax affairs between two and three months before the end of your financial year, then you can start planning how to effectively and, most of all, legally, minimize your tax liabilities.
Tax Saving Mutual Fund
Pathfinder Business Strategies, LLC a privately held company which advises corporations, consumers & small to mid size companies on asset protection, tax savings & wealth building strategies is urging all Americans to structure their finances properly to save as much money as possible on their taxes, and to prepare for the economic uncertainty facing the country.
Pathfinder, which is located in Sebastian Florida, is run by Drew Miles, a former attorney who after practicing law for thirteen years realized that most of his clients were unprepared financially for any sort of drastic economic downturn. “When the economy takes a turn for a worse, everyone starts tightening their belts,” said Mr. Miles. “But one place that is often overlooked is the amount of taxes they pay.”
Pathfinder Business Strategies has advised more than 5,000 small and large businesses, as well as individuals how to arrange their assets and income to pay the absolute legal minimum in taxes. “We have found that the wealthiest people in the country are paying as little as 5% of their income in taxes, while the average person is paying upwards of 30-50% of their income in taxes.” Drew Miles advises that the best way to prepare for a rocky economic future is to make sure that you are keeping all the money that you are legally entitled to.
Those who will be hit hardest by the struggling economy are those who can least afford it. Hard working middle-class Americans will not only feel the lifestyle altering effects of the faltering economy, but are also the ones paying the most in taxes.
The United States' economic downturn is making headlines across the world. The falling value of the dollar, combined with the sharp decline in the housing market and skyrocketing energy prices has put many Americans in a panic about the future of the economy.
“It's amazing how I'm going to save, and how much this is going to help me. This year, it looks like I'm going to save $30,000 in taxes.” said Joronda Perry, a Pathfinder client and real estate investor from Baltimore, Maryland. “Meaning that half of the income that I usually pay in taxes, I'm going to get to keep.”
In addition to tax savings, Pathfinder Business Strategies advises their clients on how to audit-proof their finances, protect their assets in the event of a lawsuit, and grow their retirement account completely tax-free.
Americans need all the money they can get in order to survive this financial crisis. While many people are turning to business opportunities which can turn out to be scams, Pathfinder Business Strategies offers a way to have more money on hand without having to make any more income.
“It is important for people to realize that Americans are making far more money than they are actually taking home,” said Drew Miles. “A very large percentage of their weekly salary is lost to taxes before they ever cash a check. This money can be recovered and used to pay for rising expenses. When you realize just how much money you are losing right off the top, tax savings is like getting an instant pay raise from the government”.
Pathfinder Business Strategies recently reported an average savings of ten to thirty thousand dollars in tax savings for each client. These savings are not of a one-time nature, but rather continue every year into the foreseeable future.
Both Jim Haines & Drew Miles are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Jim Haines has sinced written about articles on various topics from Partnerships, Finances and Certified Public Accountants. Jim Haines works for Just Accountants, the UK website where businesses can get quotes from up to 4 reputable or. Jim Haines's top article generates over 3600 views. to your Favourites.