Ideas to Reduce Your HMRC Corporation Tax

Posted by Vidit Agarwal on December 10th, 2021

If you ask any of the accountantsabout their concept of paying taxes, they would say that it is the right thing to do; and sure, it is. Since HMRC Corporation Tax is paid against your profit, if enough can be taken, you can make sure that you are not paying anything more than you actually have to. It is not about reducing the tax you need to pay; rather, it is ensuring that you only pay what you must.

It is in this scope that you can follow the below given tips to reduce the amount of the tax payable.

Claim all the expenses you can: Since the Corporation Tax is levied against the profit you make, if the expenses are more, the tax amount would certainly be lower. In this regard, you need to ensure that all your expenses have been claimed and none of it is left out.It might be a little awkward to keep the account of£3 bus ticket and £2 note-pads; but remember they add up together to a bigger amountin a year. It must be kept in mind that whatever you add must be wholly for business purpose.

Paying yourself: Even if your consultant did not remind you that you and your limited company are two different entities in the eyes of the law, have this in your mind all the times.Hence, pay yourself. So that thetax your business needs to pay naturally comes down.Since salaries are business expenses, it is deducted to arrive at the profit, naturally.

Shopping for your business: The most tax-efficient and best way to buy a computer or a phone for your business is to buy them through your business. As you know, this can reduce the tax you need to pay as the profit would normally come down.You can also take advantage of the provision by the government under the name Government’s Annual Investment Allowance.

Pay your HMRC Corporation Tax in advance to get interest: There are also options where you can, if possible,pay yourtax in advance to the office upon which the HMRC will pay you interests.This works in such a way that the tax you paid will be given back to you, ultimately lowering the tax you paid.

Paying enough attention to these factors can help you ensure that you only pay the tax owed by you. It must be kept in mind that an efficient accounting system in place with any of the professional accountantsto oversee the same can help you reduce the tax payable.

With a multitude of intricate rules and guidelines to govern the tax regime, it can be a little overwhelming for many business-persons to look after everything when it comes to HMRC Corporation Tax. This is where the established, experienced and professional accountants in Swindon can help you.