It is all too common for Small to Medium Business owners to get swallowed up by their own company; you have all heard the term ‘working in the business, not on the business’, and I can certainly relate to that.
So who gets time to look at the nitty-gritty stuff? Especially things like company structure; there are many ways to ensure that your company is running in the most tax-efficient way. For example, if you are a Sole Trader, how do you know that you wouldn’t pay less tax if you became a limited company, or even brought in a partner, child/children, or a spouse?
The Revenue, as you know, have very strict guidelines we all have to adhere to; the question is, are you missing a trick? The rules are there to be followed of course, however, you can use them to your advantage.
In most circumstances, a limited company owner will pay on average 10% less tax than a sole trader, and on the other side of the coin, if you use a vehicle for your business, sometimes it’s far more tax efficient to exercise savings as a self employed person.
Obviously these points are just the tip of the iceburg; there are a whole host of ways that you can fine-tune your business to work for you. In 22 years, we have come across way too many individuals and businesses that are unknowingly handing over unnecessary sums of money to the Tax Man. I’m talking tens of thousands of pounds; just because they’re not using the system to their advantage.
If your company is making a loss, it is easy to dismiss this, and think ‘Oh well, this doesn’t apply to me’. WRONG. There are also ways that you can turn losses into an advantage as well.
Of course in the ideal world, your Accountant should be advising you of all these issues, and of course some do, and some don’t.
My advice to you is ring your Accountant now, and ask him for 20-30 minutes of his time to discuss the structure of your company. If he/she is the dying breed of Accountants that will charge you for that meeting, then I suggest you look else where.
Business is getting a lot tougher, and we all have to work smarter; that’s a fact. Those who do not will be left behind. It takes a lot of hard work to win new customers in this day and age; don’t then hand over the benefits of that effort to the revenue.
Ben works for good accountant Keepers Accountancy. To read more articles like this, please visit our website