Strategic tax planning is a crucial step for a small business owner, reducing the end of year tax bill wherever legitimately possible. There are so many types of tax relief, expenses claims and allowances, that it is easy to miss out on some tax savings.
Travel and subsistence
During the course of your business, you will probably be required to make a number of journeys to attend training events, see clients or be present at meetings. You can claim the cost of travel as long as it was necessary for
your business. Parking fees and toll charges may also be claimed, along with subsistence costs, like lunch. If you are required to stay away from home for a night, you can claim the cost of your lodgings and an evening meal.
Using your car for business
If you use your own vehicle to travel on business, you can claim a mileage allowance. The initial 10,000 miles travelled for company business can be claimed at 45 pence per mile. Any mileage above this will be claimed at 25 pence per mile, according to HMRC regulations. If more than one person travels in the car for business purposes, you can claim an extra five pence per mile for each passenger. The passengers must all be travelling for the company in order to be eligible.
Using your home as an office
If you regularly work from your home, you can claim expenses for using your home as an office. You may be able to claim for a proportion of the bills if you work from home. This can be calculated as actual expenditure by keeping records and working out how much you have actually spent. HMRC has also devised a simple method of claiming for use of your home as an office. You can claim a set amount based on how many hours you spend working at home each month. You should consult a professional to claim the most beneficial amount.
Buying equipment for the business
It is possible to claim back the cost of some equipment and furniture used for a business. This includes printers, computers, software, printing paper, office furniture, postage, telephone bills, and more. These expenses can be deducted from gross profits to reduce the amount of net profit, which is taxable.
There are many more tax saving tips, although many are very often missed. Consult a professional to find out how you can legitimately minimise your tax bill.
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We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!