Tax Minimization Strategies for Small Business in London

Is your company paying extra tax? Looking to reduce the tax impact? As a small business owner in the London, it's important to stay up-to-date on the latest tax laws and regulations to ensure that you're paying the right amount of tax and taking the benefit of any available tax savings opportunities.

The best tax planning strategy is developing an idea that will put you in the best financial position possible. An effective tax planning strategy focuses on three key areas: reducing your income, increasing your deductions, and taking advantage of lesser tax rates. 

Here are some strategies you can reduce the tax as a small business in London:

• Make the most of tax deductions: There are many deductions available to small businesses, such as expenses for business travel, employee training, and office equipment. Make sure you're claiming all the deductions you're entitled to in order to decrease your tax liability.
• Use tax-efficient business structures: Choosing the right business structure can have a big effect on your tax bill.
• Best Planning for capital gains tax: If you sell an asset that has increased in value, you may be liable for capital gains tax. However, there are exemptions and reliefs available, such as the Entrepreneurs' Relief, which can decrease your tax bill. Plan ahead and consider the tax implications of any asset sales.
• Make use of tax-free allowances: The number of tax-free allowances, such as the own allowance and the capital gains tax allowance, which can diminish your tax bill. Make sure you're aware of these allowances and how to claim them.
• Keep good records: good record-keeping is fundamental for any business, but it's especially important for tax purposes. Make sure you keep correct records of your income and expenses, as this will make it easier to claim deductions and exemptions and reduce the risk of errors on your tax returns.

We develop a cordial relation with our clients by making them understand Accounting and Taxation matters in a simple language. Call us at 020-8239-4999 today to get Free Consultation.

Do You Need an Accountant When Starting Up a Business?

Starting a new business is definitely not child’s play even after you’ve completed with most of the red tape. Most businesses start out on limited capital and thus, for the initial phase, cost cutting is high on almost every business owner’s priority list. Even if cash is not part of the crunch, efficient use of funds would ensure that you can stretch the funds that you already possess. Due to this mindset and goal prioritisation, most business owners start out handling the business accounting side themselves. Though this isn’t a bad idea if you are good with the books, however, being a financial element, it is better here to err on the side of caution. After all, an accountant would bring much more to the table than merely good calculation skills; experience and sound advice too are factors worth considering. 

How accounting for start-ups differ

When a business is already established it is easier to take the reins and lead on. It is at the initial phase that the most crucial decisions are made and hence, these are the ones that can be the make and break ones in the long run. At this stage, having a good accountancy firm, like Doshi Accountants (one of the top 100 UK accountancy firms) would assist as your accountant can work with you on elements like:

·        -  What the best business structure would be based upon the business scenario i.e. LLC, partnership, sole-trader etc.)

·         - Providing the accounting software (since the accountant does the accounts you will not need to invest in expensive software)

·        -  If you are unsure about how a business bank account is to be opened you can get advice from your accountant

·         - Having a look at the business that you have drafted

·         - More importantly, the compliance aspects will be double checked by your accountant so that you are all in the clear when it comes to the various government regulations as well as requirements

·         - Tracking of expenditure from day one is another crucial element that is often missed out by first time business owners. An accountant can give you tips on how to best track your daily expenditure so that you have things all accurately jotted down

·         Furthermore, expenses are of two types, business and personal. You cannot mix the personal with the business and vice-versa. For instance, you have your business credit card handy while paying your child’s school fees. This could hardly be mixed up with the business expenses but you may end up doing so if you are not careful.

Consistency – the key to smooth running

When business operations take on the regular mode, accounting services help in making things run all the more smoother and hassle free. The hassle-free element kicks in with the fact that you need not slum over the books regularly if you have someone appointed to do this for you. Besides, updating the books needs to be done regularly for it to be really effective as otherwise things do not work out. Your accountant at this stage proves invaluable in:

·         - Checking on your independent contractors – the CIS element if any

·         - Explaining your financial reports and statements

·        -  Helping with the payroll and work place pension administration

·         - Solving employee queries in relation to payroll and statutory payments

·         - Giving you tax advice and etc.

If you have any questions with starting a business or general queries about accounting, taxation, VAT or payroll, feel free to contact Doshi Accountants with them. We have a team of dedicated and trained professionals who are passionate about accounts and there to assist you.