How To Reduce Your Corporation Tax The Legal Way?

Posted by RobertPattinson on November 8th, 2019

If you are looking ways tor educe your corporation tax in a legal way, then you do not have to work hard. Here are some tips and guidelines which can provide you legal ways to reduce the corporation tax bill. The tax systems are very complicated almost all over the world. Therefore, many SME owners become nervous and confused when it comes to filing taxes and increasing their savings. Tax specialist Bromley recommends these steps which are very simple to understand.

Become An Employee Of Your Own Company

This may seem like a normal idea to many business owners. However, some limited company owners ignore the tax saving tip and they do not employee themselves against a defined salary. Since you are working for your company regardless of classifying yourself as an employee, therefore; it should not be an issue to fix a salary for yourself and identify a designation as well. deducting salary can reduce the profit and hence; it reduces the corporation tax.

Start A Pension Contribution

If your corporation has a pension account, then paying into pension can be very beneficial for saving tax. Many business owners do not succeed in pension savings. These savings become a major support later in your life.

Planning before Expenditure

The capital assets and investments need to be properly planned before you execute the transactions. Purchasing a capital asset and not claiming the capital allowance as per your entitlement can really overinflate the profits. If that happens, you will end up paying more corporation tax instead of saving on the taxation. Therefore, planning your capital asset purchases shortly before the year-end can be very helpful for you.

Claiming Expenses

Claiming expenses and failing to claiming expenses can drastically change your corporation tax position. If you do not claim the expenses, then you are basically throwing your money down the drain. There are accounting software available for corporations which can be used to record all of your expenses throughout the year. The software is an automated system which records all the purchases at the time of purchase. You can take software recommendations from specialized companies helping to Reduce corporation tax in Bromley.

Income Protection

Small business owners need income protection insurance in order to safeguard the family. It also allows you a lifestyle you are used to. Being a small business owner, you can legally pay the insurance premium out of your company income and reduce the corporation tax efficiently.

Company Mobiles

Many companies provide company mobiles to their employees. In one way, they are making a name by becoming a caring employer. The phone-related costs are basically tax deductible.

Host A Party

You can be a good employer and throw an annual party for your employees. By doing that, companies can reclaim the expenses for each guest to a certain amount. Payroll services in Bromley already provide regular salary benefits to the employees. However, annual parties and events keep them motivated whereas; keep the corporation tax savings maximized.