All companies, especially those in the UK, have a responsibility to settle their taxes. This is already a given. But as a company, you can still find ways to ensure that your taxes are kept at a minimum – and you can only do this with the proper corporate tax planning activities and strategies. Here, then, are a few important – and easy – ways in which you can keep your taxes at a minimum.
Defer your profits or income
As a company, it’s only natural to want to confirm a sale as soon as possible – and get paid for it right away. But if you are determined to keep your taxes at a minimum, what you can do instead is delay specific transactions so you can shift your profits onto the next fiscal or financial year. It would make good sense, for example, to delay your profit from a sale from December of 2015 to January of 2016 – therefore making sure that the corporation tax on the sale would not be payable until after one year has passed.
Another way in which you can defer your profits or income is when you sell your goods or products not on a cash basis, but on a consignment basis. If you engage in trade based on the seasons, you can also change your company’s year end in order to exclude a period which has been profitable or include a period which has given you losses.
Increase your expenditures
What this means, basically, is to spend on certain expenses or costs that will result in a reduction of your profits. These expenditures could include contributions to your staffs’ pension funds, bonuses to your employees and directors, and making provisions and preparations for slow stocks, bad debts, or redundant payments. You can also decide to spend on discretionary expenses such as maintaining a building or decorating an office or building, investing in an advertising and promotional campaign, or making a contribution or donation to charity. You can even begin an entirely new enterprise or business which may incur losses during its first few years.
Think about capital allowance
Another way in which you can keep your taxes at a minimum is to think about capital allowance. You can decide to purchase fixed assets, for instance, or sell a piece of property at a loss. There are different allowances you can take advantage of and different regulations as well, each with its own set of advantages for your company.
Your other options
You can invest in green technology, which can give you tax relief. You can also make a tax-efficient investment, such as VCT and EIS programmes or schemes. The list is seemingly endless. If you would like to really benefit from proper corporation tax planning, you should speak with a specialist such as www.wfs4taxplanning.co.uk for essential advice.
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