As a principal Chippendale and Clark always advise a profit centred approach to business, we want to see clients use their monthly accounts and reports to enact positive business change resulting in increased profits.
Chippendale and Clark are always actively looking at client’s affairs to recommend corporation tax saving methods. Below we run through the most effective solutions.
Remember the key to success in tax planning, is the planning. Tax planning does not work retrospectively.
The classic advice is to spend money to reduce your tax bill. We take this one step further spend money on things that will save costs or improve business performance.
Purchase of your own building can protect you from further rent rises as well as rise in value over a period. The interest on any loans to purchase buildings are also deductible.
While the fabric of a building is not deductible against corporation tax a proportion of the price can be in the form of capital allowances. This is a technical area that Chippendale and Clark can deal with; you just need to let us know your intentions before a purchase happens.
Company contributions to pension funds are extremally efficient at lowering income tax and corporation tax. It is important to note you cannot spend this money until retirement, but for some clients this might be only 5-10 years away.
The best form of tax planning is by using investments that go up in value, not to use depreciating assets that go down in value i.e. equipment.
Corporation tax savings can go hand in hand with retirement and exit planning.
Research and Development Tax Credits
A very specialised area but very effective, if your company does undertake the development of new services or products.
A general rule is that if you are producing new services, procedures and/or products which would be difficult for a professional in your field to produce and that comes with a risk of failure then an R&D claim can be made.
R&D claims amplify expenditure to 2.3 their original value for a corporation tax deduction.
Electric Cars / Vehicles
Electric cars are incredibly efficient for corporation tax and income tax. Currently there is 100% write off against corporation tax. Take an example of a 100K Porsche Tycan, the purchase of this vehicle via a ltd company will result in a 19K corporation tax saving.
Just think of the personal savings on fuel as well.
Organisation, Real time Accounts
When it comes to running a business, many of our client’s dread administration and paperwork. As a result, the importance of keeping all purchase receipts is sometimes not recognised, the receipts regularly get lost, along with your opportunity to claim them as a business expense.
To reduce this risk, and with the intent of ensuring that all receipts are accounted for, Chippendale and Clark use cloud software, such a Receipt Bank, to enable clients to record their receipts by taking photo of their receipt on their smart phones as soon as the business expense is incurred, these are then stored digitally, ready for our bookkeepers to analyse appropriately back at the office.
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