Looking to legally reduce your tax bill? It’s simpler than you think! With a bit of knowledge, organization, and effort, you can cut costs and stay compliant with HMRC. Here are 10 effective strategies:
1. Claim All Expenses: Track every business expense, from equipment to small purchases like stationery. Use apps like Xero, QuickBooks or Freeagent to simplify this process. Claim capital allowance where possible.
2. Use a Company Mobile: Transfer your phone contract to the business and deduct all related costs.
3. Claim Mileage: Use HMRC’s mileage rates instead of owning a company car for more tax efficiency.
4. Buy Work-Related Books and Subscriptions: Technical books or subscriptions tied to your job are tax-deductible.
5. Host a Staff Party: Limited companies can claim up to £150 per guest for an annual event—partners included. The cost per head can include food and drink, accommodation and transport – but must not exceed the £150 threshold.
6. Pay Early: Settle your Corporation Tax bill ahead of time to earn interest from HMRC.
7. Pay Yourself a Salary: Salaries reduce taxable profit. You can also pay a spouse if it fits their tax band.
8. Contribute to a Pension: Pension payments through your business are tax-efficient and help your future.
9. Get Income Protection Insurance: Pay for it via your company to lower tax and safeguard your income.
10. Hire an Accountant: A skilled accountant will identify savings you may miss and handle time-consuming tasks.
Tip: Tax laws are complex—always consult a professional before implementing strategies. Save smart, stay compliant, and keep more of your hard-earned money!