When you start a business, the one thing that you need to focus on is the corporation tax, yes, the dreaded statement that can manage to send chills down every business. While all businesses must pay taxes, you can sometimes over-pay or miss certain vital factors. That is why it is necessary for you to know how you can reduce your corporation tax bill in a way that doesn’t break any laws and you get to pay all that you owe the government.
1. All Business Expense Should be Claimed
Make sure that you are claiming all businesses expense no matter how small it is. A taxi ride or a stapler being bought, anything and everything need to be lodged under a business expense. By doing so, you will be saving up on a lot of extra money that you may have to pay in taxes.
2. Milage Should Be Claimed
If you are using any transport for your business, then claim milage for it. It is a part of your business and helps it grow to come under business expenses.
3. Get a Company Mobile Phone
There is no need to use your phone when dealing with your business. A business requires multiple calls and conversations on the phone. Register your business phone under a business expense so that all the credit and calls are filed under business and not personal use.
4. Staff Christmas Party is Mandatory
Every business is allowed a specific compensation for a staff party. Use it well and throw your staff a Christmas party where per person you can use the money allotted to you. The business covers it.
5. Paying HMRC Early Helps
Pay HMRC on time because delaying it will cause a payment interest and that will be something you will have to pay out of your pocket. Remember to pay them on time, always.
6. Pay the Directors a Salary
The salary paid to staff is paid under the business expense. Use this and pay your directors a salary that will not cost you anything personally.
7. Use the Annual Investment Allowance
The annual investment allowance is something that is given to businesses by the government for their yearly expense. Use it wisely for your office supplies and other essential services.
8. Research and Development Require Tax Relief
If your business is doing research and development in a particular department, get the tax relief service that helps cater to your research needs and provides you with the means to continue with it.
9. Employee Share Scheme
If you can offer your company’s share to an employee, you can get a deduction in corporate tax and help your company grow.
10. Start a Creative Industry
Start a company that is involved in creating creative arts and other mediums that support the media industry. The government will provide you with extra tax relief if you manage to produce something media-friendly like a videogame.
With these ten ways, you can reduce your corporation tax bill significantly and in a way that inevitability helps you and your businesses.