One of the last things that you want to see taking place is your corporation’s tax bill skyrocketing. If and when it does, it has a significant impact on your monthly budgeting. Thus, you need to have some means up your sleeves that will help you keep the corporation tax under control. Now, there are several ways in which you can keep the bill under control. On this page, let us discuss the strategies that you may adopt to reduce your corporation’s bill.
Claiming Tax Relief on R&D
One of the most effective ways to reduce your corporation’s tax bill is by claiming tax relief on research and development (R&D). As the name may suggest, R&D tax relief is an incentive that is particularly designed to encourage various in-depth research and development of innovative ways and new technologies that may come in handy in the manufacture of improved products and the innovation of better services.
More investment in R&D and qualifying expenses for the same will help you claim more tax relief, thereby reducing your taxable profits. A professional tax accountant will give you further insight in this regard.
Paying a Lower Effective Rate with Your Patent Box
The Patent Box Scheme will lower your effective tax rate to merely 10% on the profits that you earn from your patented products, services, or processes. This tax incentive for your patented business will lower your tax savings significantly.
Showcasing your cost of subscription and training
The training and subscription costs can be paid for by the company without requiring the benefiting employee to pay income tax. Your business may be able to deduct these costs, meaning that the expansion of your workforce will not incur any taxes.
Investing in the EIS, or Enterprise Investment Schemes
The Enterprise Investment Scheme (EIS) is another instrument that can lower your corporate tax liability. By offering investors tax breaks, this instrument can promote investment if you are running a relatively small-scale, yet/or riskier business. Professional accountants for small businesses will help you learn more about EIS and its way of functioning.
Using Capital Gains Tax Reliefs
Capital gains tax relief plays a pivotal role in reducing the overall tax liability. All you need to do is know the criteria and chalk out the right strategies.
Not missing the tax deadlines
Never miss your tax deadlines. This will cost you higher interest rates, penalties, and other costs. That is why it is imperative that you pay tax files and make the payments on time. Ensure that every document is handy and organised by the time the deadline for payment arrives. You need to make timely filings and payments to make sure that you maximise your corporate tax liability and take the fullest advantage of various tax solutions.
Know the tax deduction rules properly.
You need to have a sound knowledge of the rules and regulations pertaining to tax deductions. This ensures that you have legal deductions that are on par with the tax legislation norms. Your chartered accountant will help you in your effort to know these deductions and related norms.
Investing in New Plants and Machinery
You need to know the right way to invest in plants and machinery strategically. It will help you gain invaluable capital allowances. Besides, it will also reduce your taxable profits, which will in turn lower your corporation’s tax bills.
So you see, these are some of the best ways of reducing your corporation’s tax bills, something that is imperative in your business endeavour. For further details, you may get in touch with Biz Accounting Solutions Ltd, as we are one of the most competent accounting experts in the UK. Call us to book our service.