Tax Management for Start-up Businesses
Posted on 5th January 2021 at 09:30
Starting a business is an incredibly exciting experience and can open up a whole world of opportunity. Whilst the process is exhilarating, fun and highly creative, you also need to ensure that your tax is properly set up and designed to be both efficient and compliant.
TreyBridge Accountants is here to support you every step of the way, from registering your business with Companies House, to filing your tax returns and saving you money for many years to come.
Choose a business structure
It’s easy to jump into self-employment and hit the ground running without thinking about what kind of business structure suits you best. You could be a sole trader or set up a limited company, or maybe a limited liability partnership would be better if you have at least one other person who you consider a business partner.
Deciding the most suitable route is tricky, so we’ll help you to choose the right option and remove the mountain of paperwork in the process.
Use cloud accounting software
You absolutely must have all of your invoices, expenses, receipts and transactions properly documented in order to keep HMRC and Companies House satisfied, otherwise you could find yourself paying the wrong amount of tax or even being fined and audited.
We use a variety of cloud accounting software that comes with multiple benefits, including simplicity, sophisticated digital security, GDPR compliance, and the ability to add invoices, bills and receipts 24/7 through websites and apps.
Withdraw money wisely
There are numerous purchases that can come out of your business bank account, which helps you to manage your funds to maximum effect. Meanwhile, directors of limited companies can take out both dividends and a salary, which ensures ultimate tax efficiency.
There are a lot of other factors that apply depending on the size, nature and type of business you own, so our tax consultants are on hand to create a bespoke tax management plan that will optimise your day-to-day spending.
Employ your spouse
Many business owners employ their partner or spouse to help with certain tasks, such as administration, marketing and sales. This is a tax-efficient way of taking another person on board to manage important duties that you don’t have time for, all while keeping your hard-earned cash under one roof.
Explore tax relief opportunities
There are so many tax credit schemes, grants and initiatives in place that help start-ups to save money and improve their cash flow. Prime examples are tax relief for working from home, claiming expenses for work-related travel and accommodation, and the very popular R&D Tax Credits for businesses that carry out any form of research and development.
Take out a pension
No matter what type of business you own, there will be some form of tax relief that you can take advantage of through a pension. Our tax specialists keep their fingers on the pulse of the most trusted pension schemes, so all you have to do is ask us for advice.
You may be eligible for tax-free childcare
The tax-free childcare scheme for parents and legal guardians offers 20% off childcare costs. This is an excellent way to save money throughout the year and you can find out more in this blog post.
Tax relief on parties and events
Business owners can claim £150 per person per year for staff parties and events. Usually these are held at Christmas, although it could be for a different kind of event such as the company’s anniversary, a charity fundraiser or an awards ceremony.
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