No one likes paying their tax bill but it’s a part of running a business that we all have to do. Whilst it’s obviously important to make sure that you submit the correct information to HMRC in a timely manner, there’s no sense in paying more than you have to.
Some small business owners are unaware of the claims and reliefs available to them so we have listed below 5 legitimate ways to reduce the amount of tax you owe…
1. Claim your expenses
Knowing what you can claim as a business expense is important so that you can maximise your profits and not pay more tax than is necessary.
You can include things like printing costs, utilities and fuel in your allowable expenses so that these come out of your profits before you are taxed.
Take a look at our blog here for full details of what you can claim as an allowable expense.
2. Claim employment allowance
Check if your company is eligible to claim the employment allowance. This allows employers to get up to £3,000 a year off their National Insurance bill.
3. Take advantage of creative industry tax reliefs
If you work in the creative industry there are some special tax rules that may apply.
Those involved in the production of things like certain films, children’s television programmes and video games can claim. Check on the HMRC website to see if you are eligible.
4. Claim capital allowances
Capital allowances allow businesses to claim tax relief on certain types of expenditure such as computers and company cars.
Find out more here about how to claim capital allowances and save money on your tax bill.
5. Pay your tax early
It might sound a bit crazy but by paying your tax before it’s due you can receive credit interest from HMRC.
The current interest rate is 0.5% and the earliest that HMRC will pay interest from is six months and 13 days after the start of your accounting period.
If you’d like any more information on the points raised above, or advice on how to lower your tax bill, please get in touch with us here at Magpie Accountancy.