STOP BUSINESS OWNERS: Save Money with these Smart Tax Strategies

Newsflash… HRMC isn’t going to come knocking on your door to tell you how you can save on your tax bills anytime soon. That’s why I’m here. Around 20 years ago when I started my entrepreneurial journey, I admit, my primary goal focused solely on making money. However, that meant I made one huge rookie mistake that I didn’t notice until it was too late. I hadn’t considered the side effect of making money - taxes. But, fear not, because I’m about to drop some tips that’ll help you avoid these pitfalls and keep money placed firmly within your pocket.?

Tax Offsetting:?

One effective way to avoid overpaying is by leveraging your tax offsets. For instance, did you know that every year, you can offset up to 10,000 miles at ￡0.45 per mile against your company's earnings? This, as you can imagine, is super relevant when you’ve been using your personal vehicle for business-related travel. Extra information - This rate changes to ￡0.25 per mile after you reach the 10,000-mile threshold. One thing to always remember is the difference between regular commuting and business travel. Regular commuting doesn’t generally count towards this, however, for business travel you can save significantly. To give you perspective, if you were to reach the 10,000-mile threshold, it would equate to you offsetting ￡4,500 on your tax bill.?

What Else??

Don’t stop at travel expenses. Consider other costs directly related to day-to-day business operations. This includes things like your phone bill or even the phone itself! If you have loaned your company some money you can look at some interest reliefs that may be available to you like Personal Savings Allowance which means you could earn up to ￡1,000 tax free in interest depending on your tax threshold. What about claiming for the cost of running your business from home?

Can I Offset…?

If you ever feel unsure about if something you want to offset qualifies you should consult a professional accountant or tax advisor, any good tax advisor will save you more than they cost you. An additional step you can take would be educating yourself on the latest tax laws and breaks. This kind of information is something that’ll pay you for life. One book I recommend is “Putting It Through the Company” from the Tax Cafe. Even though I have no affiliation with them, I have to admit that I find their books extremely helpful in staying updated on the latest tax exemptions and strategies. For more information click here.?

Being proactive about taking time to understand and apply these tax strategies can make a significant difference to your business’s financial health and stability. So, if you need one takeaway from this blog, let it be this. It’s not just about how much you earn, but also how much you save and keep. Stay informed, seek advice when unsure and always be on the lookout for legitimate ways to maximise your money.

And REMEMBER THIS!

Tax regulations are subject to change year of year so always check that the rules you are playing by are still relevant in the tax year you operate in. Please also bear in mind that I am based in the UK so if you are elsewhere then check the tax rules for your country.?