You may have read about the tax planning carried out by UK PLCs to reduce their corporation tax bill and thought 'Why can't we do that?'
Well, maybe you can. You may not be able (or want) to commit to some of the cross border tax planning strategies that a much bigger, global business can. But there are simple tax planning strategies available to pretty much any business.
Firstly check whether you are making the most of your legitimate corporate tax reducing opportunities and, at the same time, consider related business tax and financial planning strategies that could improve the amount of profit you retain.
A simple audit of your company’s tax affairs should look at:
- Are you maximising corporate tax reduction through benefit planning – including pensions?
- Are you making the most of the Annual Investment Allowance?
- Do your salary, dividend and pension strategies minimise tax and national insurance outflow?
- Have you considered all of the corporate investment possibilities – taking account of its possible impact on entrepreneurs' relief?
- Does your tax planning strategy minimise business risk?
I am firmly convinced that almost every SME can see reductions in their tax liabilities and retain more of their hard earned profits if they undertake an annual tax planning review.
Andy Parker
Chartered Accountant and Chartered Financial Planner, Birmingham