The taxation system can come across as very complicated, and so it’s no surprise that many businesses (especially the small enterprises) often scratch their heads whilst trying to figure out what the best way is to approach the whole taxation system. In fact, it is estimated that, in 2016, enterprises overpaid the government in taxes by about £5 billion – simply because they did not take advantages of the benefits and reliefs that are available. In other words, simply because of ignorance of the taxation code.
Your taxes should be carefully planned. Want to know how you can grow your enterprise faster? Here are some important tips you should remember for proper tax planning for your small business.
Think about taxation now – don’t wait until the end of the year. It’s the planning at the start of the year that will make you save a lot of money. A good accountant such as the accountants central London from GSM & Co. should be able to explain all the intricacies of the taxation law; they should also be able to advise you on what to do and how to classify your various incomes and expenditures. Don’t start until the end of the year when taxation forms are due – start now.
Check the classification
The way your business is classified will have a lot to do with how you handle your taxes. Perhaps it’s time for a review. A sole trader tends to pay a lot more to the government than a limited partnership does, for example.
Is a flat rate possible?
Do you have a turnover of more than £150,000 a year? Then maybe you qualify for a flat VAT rate – which will considerably make things a lot easier on you and your venture.
Maximise your deductions
It’s a complex structure, but there are many things you can deduct from your bottom line (what you pay taxes on). Maximise those deductions; study your tax code.
With the complexities (and dynamic environment of the government laws when it comes to taxes), you may save a lot by hiring an expert to figure it all out for you.
Here’s the thing: as a manager, you will never know every detail about everything that is going on; you will never know the perfect way to make a sales call, you will never know how to stock your warehouse in the most efficient manner. However, it is the manager’s job to make the most efficient and most advantageous method available – and that’s where expertise comes in. The manager doesn’t need to know how to do things in the best way possible; the manager needs to know how to find the people who do. Find people who know the tax code. Start being efficient. Start now.