Courtesy of thebestof Hertford member Leggate Associates, here's some brilliant tax saving advice in an informative and humourous blog post to make the summer months easier:
There is no single magic bullet which keeps tax as low possible. Instead there are a number of opportunities, small and large, which when used together can create worthwhile tax savings. Some are obvious and others may require professional assistance. The following list is not exhaustive but is simply designed as a prompt to business owners to look at their tax structure with fresh eyes and perhaps make some savings.
We never recommend that our clients spend money just to save tax. If you spend £1,000 simply with the intention of reducing your tax bill, you might save £200 but have lost the other £800. What matters most is not your tax bill, but the amount of available cash you have left to spend on your family or other interests.
1 Little Ideas – Big Savings Retain and record all small items of cash expenditure. We all spend a small fortune in cash on car parking, car washing and other low value transactions. Keep all of your pay and display tickets and record the amounts you pay out. It is quite usual for a business to spend up to a £1,000pa on small value items but not actually put them through the accounts because it appears to be too much hassle. Recording an extra £1,000 on expenses would save a company at least £200 per annum, and could save some high earners over £500.
Each business varies in the type of expenditure it has: give some thought to all those small items that could help reduce your tax bill.
2 Children as employees. Whilst sending children up chimneys is unfortunately now frowned upon in some quarters, provided you can justify work that they do is for the benefit of the business, then it is possible to claim tax relief for at least some of the money that is given over to the little leeches darlings. Any claim for such expenses must be capable of standing up to scrutiny in the event of an enquiry by HMRC so the children do have to be out of nappies but preferably teenagers. Tasks that they can undertake to earn their keep include secretarial duties (answering the phone, filing, bookkeeping etc) website maintenance, leaflet delivery and car/van washing. Paying a child just £10 per week will save at least £100 in tax each year and give the child a sense of financial responsibility. Maybe.
3 Use of your home as office. Even if you have formal business premises, it is possible to claim for use of your home as an office if you do some work at home, such as bookkeeping. The rules on what can be claimed have been relaxed in recent years and it is even possible to claim an element of mortgage interest within the claim without creating a Capital Gains Tax problem. HMRC provide a very useful guide here: http://www.hmrc.gov.uk/manuals/bimmanual/bim47825.htm . If you follow some of the examples some taxpayers could make substantial additional tax savings.
4 Work Green. There are some great tax breaks for investing in green technology. Businesses can obtain 100% tax relief in the year of purchase on the installation of solar panels (pv and solar water), energy efficient hand dryers, pipe insulation, boilers etc. Some technical guidance can be found here: http://www.eca.gov.uk/etl/claim/. Whenever a business owner is considering replacing existing equipment, they should always check to see if there is a “green angle”
Keep your eyes peeled for a following 4 more tips from Leggate Associates about tax saving this summer. You can contact Leggate Associates who are currently running a brilliant promotion on 01763 289607 and ask then ask them about a free no obligation tax advice service by quoting 'thebestof Hertford'
Also, you can visit their feature on thebestof Hertford by clicking here
Please ensure you read the disclaimer below before undertaking any of the advice you have read in this blog post:
Disclaimer: The following article is based on tax legislation and practice at 24 June 2011. Tax law is changed frequently and the circumstances of each individual or company vary enormously. Please seek the advice of your accountant or tax adviser before using any of the following suggestions. This article does not constitute advice and therefore neither Andrew Leggate nor Leggate Associates Limited will accept any liability for losses arising from the application of the following suggestions.
Member since: 10th July 2012
Hi there, my name's Victoria and as owner of thebestof Hertford and Ware it's my job to find and promote the best information, events and businesses that Hertford and Ware have to offer!