By starting to plan tax as soon as possible, you can save you time, money, and an enormous amount of stress - sorting everything out last minute is never a good idea!

Tax planning helps you minimise what tax you pay. By taking full advantage of any exemptions, deductions, allowances, and exclusions, you can also achieve your financial goals easier. 

Some benefits of a good tax plan are:

• Reduced tax rates and bills.
• Better control over payments and timings.
• Full usage of tax credits.
• Tax relief legislation advantages.

Tax regulations are always changing, so don't forget to frequently review your strategy to adjust your plan as necessary.

Your business structure will impact both your tax liabilities and the allowances you’re eligible for. 

You're considered self-employed for tax purposes if you are set up as a sole trader or partnership, and you'll need to complete an annual Self Assessment return for HMRC.

Limited Companies have different tax requirements, such as Corporation Tax, and possibly VAT.

It can be helpful to speak to an accountant before starting a new business to help you consider the pros and cons of each legal structure.

Here are key considerations for tax planning that you should know about.

Planning for Corporation Tax can include thinking about deferring income or profit to reduce your tax bill as much as possible. You could also bring costs forward to a different accounting period or take full advantage of capital allowances. 

The Government has launched a new 130% Super Tax Deduction for companies investing in qualifying new plant and machinery assets between 1st of April 2021 and the 31st of March 2023! You can read all about it in our blog here.

Buying and selling assets is normal in business - but this means you'll need to plan for capital gains tax, especially if you work within real estate. You can know which assets are exempt and avoid a surprise bill by planning tax ahead.

Business owners - don't forget to look at personal tax planning.

Although dividend planning won't help with company tax plans (as dividends are taken post-tax), it will be beneficial for your personal earnings.

If you're a shareholding director of a Limited Company and are expecting the business to make a considerable profit, it could be a good idea to withdraw a larger dividend, as it can help minimise your taxable income.

If you’d like to find out if dividends or salary is the best option for you, we have a useful blog here.

International tax planning is important as more and more business venture overseas and deal in international markets. One of the things to avoid is double taxation by using foreign tax credits to the fullest extent and timing your tax bills to your benefit.

A business must register for (and pay) VAT if its turnover is £85,000 or more. VAT, also known as Value Added Tax, offers certain benefits and you can register voluntarily if it suits your business.

VAT-registered businesses must charge VAT on goods or services, but can also reclaim VAT on business-related purchases. Currently, the standard VAT rate is 20 percent, although some products and services have a lower rate of VAT, or are fully exempt.

The good thing about becoming VAT-registered is that you can reclaim up to four years of VAT on products or services you bought before the date of your registration!

Those registered have to report to HMRC every three months the amount of VAT they have charged or paid via a VAT return. This must be done even if there’s no VAT to report.

Considering your business structure, timing expenses, and understanding the various types of tax your business is required to pay are key elements to tax planning. Speaking with a qualified accountant can help you uncover ways to reduce your tax liability and save money now and well into the future. You can get in touch here. 

Have any questions or need any help? We can help! 

Here at Kubed Solutions we offer a FREE 30-minute consultation to help you with your tax compliance and accounting needs.