Paying taxes is unfortunately an inescapable part of running any business. Here are some simple ways of making sure you don’t pay more than you need to.
Make sure you include all allowable business expenses. When you have recently set up in business, you may not be fully aware of all the expenses that you can claim.
If you have made losses in any tax period, under certain circumstances you may carry these forward to offset future taxable profits or back against past profits.
You can defer paying capital gains tax if you plan to buy another asset with the proceeds. This is known as ‘rollover relief’ and you can use it normally for up to three years after the taxable event.
Pension contributions reduce your taxable profits. You may even be able to set up a pension scheme that allows you some say over how those funds are used.
If you do intend to buy capital assets for your business, bring forward your spending plans to maximise your use of the writing-down allowance, which is the portion of the cost of the asset you can set against tax in any year.
Identify non-cash benefits that you and others working for you can take instead of taxable salary.
Examine the pros and cons of taking your money out of a limited company by way of dividends or salary. These routes are taxed differently and may provide scope for tax reduction.
If your spouse has no other income from employment, he or she could earn a sum equivalent to the annual tax-free allowance (currently about £4,000) by working for your business.
If you incurred any pre-trading expenses at any stage over the seven years before you started up in business, you can probably treat them as if you incurred them after trading started.
You may be able to treat the full purchase price of business assets you bought through hire purchase in your capital allowances calculation.
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Source:http://www.dummies.com/how-to/content/ten-ways-to-minimise-tax.html
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