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IN SPITE OF the UK being one of the highest taxed countries in the world there remain numerous ways to save taxation writes Tony Byrne (pictured), managing director of Wealth & Tax Management. Unfortunately, I rarely find that business owners maximise their tax mitigation opportunities. For the life of me I do not understand why.
Here are five simple ways to save you tax on the sums you withdraw from your business.
Pay yourself dividends rather than salary This strategy is not as clear cut as it used to be. However, it will still save you taxation overall under many circumstances. Worth running past your accountant.
Pay your spouse or partner and your children/dependants, not just yourself Again, one to check with your accountant. Usually it has to be a bona fide employment so it will not work for minors.
Maximise employer pension contributions to your pension and your family members’ pensions This is a tax free benefit in kind so well worth doing now that the annual allowance for maximum pension contributions has increased to £60,000 per annum per person.
Join a salary sacrifice electric car scheme This is a fantastic low-cost benefit in kind especially for 100% electric vehicles.
Claim as many legitimate business expenses as possible If the expense is genuinely a business one then get your business to pay for it. If your business is VAT registered and it is a VAT receipt you can not only claim back the VAT at a rate of 20 per cent but also Corporation Tax relief of up to 25%.
If you are interested in ways to save tax, take advantage of a one-hour Discovery Meeting either at our offices or via a video conference call at our expense worth £270 to each of the first three readers who contact us before December 31 2023. You know it makes sense. We offer a great cup of coffee too. Ring us on 01908 523740 or for free on 0800 980 4516 or email wealth@wealthandtax.co.uk and quote DECEMBER 2023OFFER to book your free Discovery Meeting.
RISK WARNING: The Financial Conduct Authority does not regulate tax planning. The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction. All information is based on our current understanding of taxation, legislation, regulations and case law in the current tax year. Any levels and bases of relief from taxation are subject to change. Tax treatment is based on individual circumstances and may be subject to change in the future. This article is based on my own observations and opinions.
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