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Business Tax  •  Personal tax  •  Taxation

Top 5 tax planning opportunities for small firms

By Lesley Stalker on 6 August 2009

There wasn’t much cheer in the Budget for small business owners, what with the new higher rate of tax introduced and the implications on pension contributions. But there are always opportunities for tax planning, which could help minimise your tax liabilities in the future. Here are some of the most worthwhile:

  • In 2010 the net tax payable on dividends for company directors will rise to 36.11%. If you are an owner manager it may be possible to accelerate any payments due to avoid a steep hike in the short term.
  • Dividend tax isn’t the only thing due to increase, also due for rises are NI contributions and income tax. Consider the merits of accelerating any bonus payments as well as dividend payments.
  • Is your business currently making a loss due to the economic climate? You are eligible to use losses made in the current tax year and offset this against taxes paid on previous years’ profits going back up to 3 years.
  • If you are trading as a partnership or sole trader with sufficient profit levels, the new 50% tax rate may impact your income considerably. It may be beneficial to incorporate, giving you greater flexibility over when and how to pay your taxation dues. This topic was covered in detail in a recent Livewire, click here for the full article.
  • Finally, if you are in the lucky position of not currently being loss making, you may be in a position to consider investments in new plant and machinery. There are two ways to benefit here, through either the Enhanced Capital Allowances scheme for so called ‘green assets’, or through the Annual Investment Allowance, for which the write down level has been increased from 20% to 40% after the first £50,000 which can be written off in year 1.

To find out more about tax planning opportunities, please contact us to discuss your individual circumstances

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60 Day Deadline for CGT Returns and Tax Payments

If you sell a property and incur capital gains tax on the transaction, you will need to file a tax return and also pay any tax that is due within 60 days of completion, or penalties will arise. Need help with your property taxes? Talk to us.

There wasn’t much cheer in the Budget for small business owners, what with the new higher rate of tax introduced and the implications on pension contributions. But there are always opportunities for tax planning, which could help minimise your tax liabilities in the future. Here are some of the most worthwhile:

  • In 2010 the net tax payable on dividends for company directors will rise to 36.11%. If you are an owner manager it may be possible to accelerate any payments due to avoid a steep hike in the short term.
  • Dividend tax isn’t the only thing due to increase, also due for rises are NI contributions and income tax. Consider the merits of accelerating any bonus payments as well as dividend payments.
  • Is your business currently making a loss due to the economic climate? You are eligible to use losses made in the current tax year and offset this against taxes paid on previous years’ profits going back up to 3 years.
  • If you are trading as a partnership or sole trader with sufficient profit levels, the new 50% tax rate may impact your income considerably. It may be beneficial to incorporate, giving you greater flexibility over when and how to pay your taxation dues. This topic was covered in detail in a recent Livewire, click here for the full article.
  • Finally, if you are in the lucky position of not currently being loss making, you may be in a position to consider investments in new plant and machinery. There are two ways to benefit here, through either the Enhanced Capital Allowances scheme for so called ‘green assets’, or through the Annual Investment Allowance, for which the write down level has been increased from 20% to 40% after the first £50,000 which can be written off in year 1.

To find out more about tax planning opportunities, please contact us to discuss your individual circumstances