As the year comes to a close, it’s a good idea to think about tax planning for the future. A lot has changed in the past 12 months so you may be eligible to reduce your tax bill in 2012.
1. Are you incorporated? As businesses often grow in an organic manner, you may find that your company structure isn’t the most appropriate not only operationally, but also as regards your tax liability.
2. Assess your company’s reward package and aim for a tax efficient mix of salary, dividends, bonuses and benefits.
3. With respect to share schemes, consider enterprise management incentives and approved share option schemes, which are a great way of incentivising your employees in a tax efficient manner.
4. Consider making further pension contributions – pension schemes represent one of the few government sponsored tax saving vehicles where significant tax relief is still available.
5. Ensure efficient use of allowances on capital expenditure. Full advantage should be taken of those allowances giving 100% relief.
6. Consider bringing forward revenue expenditure such as repairs to equipment and redecoration of the office, this can help to reduce your taxable profit in your current financial year.
7. Many businesses are eligible for the annual investment allowance which gives 100% relief on the cost of capital expenditure in the year in which the expenditure was incurred. The limit on this type of expenditure is currently £100k, but is reducing to £25k. So if you’re planning on buying some new plant or upgrading equipment, consider bringing the purchase forward to just before the year end.
For more information please contact our tax team.
