Most of us would like to pay less tax, allowing us to invest more in our businesses, and making our figures better. With corporate tax planning, companies can check that the tax that they are paying is correct. The Government offer a number of incentives to help businesses and this often involves reductions in the amount of tax that they have to pay in certain areas. Corporation tax planning allows businesses to check and apply for any tax relief that might be available to them.
Does it apply to you?
So how do you know if corporation tax relief is applicable to you and your business?
- Does your business generate over Â£10,0000 in profits?
- Do you have an overdrawn director's loan account?
- Do you think that you pay too much tax?
The amount of money that you can save depends on the amount of profit your company makes, along with other aspects of your business, such as whether you are a limited company, how much you earn and the value of your expenses. Every situation is different and this is why it is important to get a knowledgeable tax planning specialist to see what options are available to you.
Some of the corporate tax planning strategies include:
- Moving to a limited company and setting your VAT to a flat rate scheme
- Paying yourself a minimal (director) salary
- Applying for entrepreneurs relief if you are selling or closing down your company
- Getting tax relief from paying pensions, life assurance policies or investments
- Claim the right expenses
- Timing dividend extractions properly to reduce the amount of tax paid
- Tax relief in buying capital assets
- Submitting documents and data on time to cut the risk of penalties
The Benefits of Corporation Tax Planning
There are a number benefits to be taken from corporation tax planning. Some of these benefits include:
- Relief in income and corporation tax
- Compared to the typical PAYE or dividend route, it is more tax efficient
- There is no annual Benefit in Kind
- There may be significant Inheritance Tax opportunities
- It can apply to bonus provisions which were made in previous years
- There is a greater reward for the individual
- Funds can be protected from liquidation and bankruptcy
Corporate tax planning is not about trying to cheat the system, it is about companies being able to claim what is lawfully theirs, giving them the opportunity to make a real go of their business. We can't all be experts on tax, and the system is very complicated, so the best way to make sure that your businesses is benefitting from everything that they are entitled to, is by speaking to a corporate tax planning specialist like those we have at WFS.
If you think that your company could benefit from corporate tax planning, why not click here and contact WFS Consultancy Services and see what you might be eligible for?