Tax Advice for Businesses
How can I pay less tax?
This is the first question most accountants get asked. The question should be:
“How can I pay the right tax?”
Sole Trade v Limited Company
For start-up businesses, one of the most common questions is whether they should set themselves up as a sole trader or a limited company. Some still consider partnerships and LLPs (Limited Liability Partnerships), but they’re less common.
We help people work through the decision by covering:
- A comparison of the tax and National Insurance implications
- The difference in work required — and the associated fees
- The legal and regulatory duties of each structure
- A list of the practical admin tasks that need to be done
- Privacy considerations
- Personal finance implications — such as mortgage applications
- Ownership structure for now, and for exit planning
It’s not just start-ups that need this kind of business tax advice. What’s right at the beginning won’t always stay right. That’s why we offer this service to established businesses too.
And, it’s not just sole traders thinking about whether to “incorporate”. It’s also limited company director-shareholders thinking about whether to “dis-incorporate”. Especially with the upcoming changes to the information that has to be published at Companies House. The tax advantages of incorporation have already been eroded over the last five or six years. And that’s exactly why the conversation needs to be wider than just tax. (Bet you never thought you’d hear that from an accountant?)
Compensation Strategy for Limited Companies
For business owners who’ve chosen the limited company route, the real question becomes:
“How do I structure compensation packages for myself and my key people?”
It’s not just big corporations that need to think about talent retention and incentives. We help owners design tax-efficient compensation strategies tailored to their business, including:
- The best split between salary and dividends
- How to maximise tax-free benefits in kind
- Which tax-efficient employee benefits are available
- How to structure their share capital
- When to extract profits
Key Areas for Tax Planning
Other key areas of advice include:
Pension contributions: timing matters. Miss the payment deadline and you delay relief by a year. Get the timing wrong, and you might trigger the higher marginal rate (currently £50,000 for a standalone company). That’s a 7.5% swing in your effective tax rate.
Capital allowances: a valuable relief for businesses investing in infrastructure. That could be vans, cars, laptops, printers… even your website. We help clients maximise available reliefs.
Research & Development (R&D) tax relief: it’s had a lot of bad press, mostly because of firms making bad claims. This is a specialist area. We work with a panel of trusted firms and can help you understand if it’s worth pursuing. We’ll advise on the cost-benefit — and the risks. HMRC treats this as a high-risk area, with specialist teams reviewing claims.
Incentivising Key People
We also work with ambitious and growing businesses to design longer-term incentives for key management. That might be Growth shares or EMI schemes (Enterprise Management Incentives).
Increasingly, we’re seeing more interest in Employee Ownership Trusts (EOTs) which is very exciting.
Business Tax Advice in Horsham
“By failing to prepare, you are preparing to fail.” – Benjamin Franklin
We offer business tax advice tailored to what your business actually needs. Our advice can be offered both as part of a retained service, or on an ad hoc basis. And like all tax advice, it works far better when it’s ahead of the decision, not playing catch-up.
One of the benefits of working closely with your account manager, on both your personal and business affairs, is that they’ll be thinking about your future. They’ll help you to understand what you need and when.
Our offices are based in Horsham, but we offer tax advice to businesses throughout West Sussex and the surrounding counties. If you run a business and you’ve read this far down the page, we’d love to hear from you. Call us today on 01403 780858, send us an email or fill in our form.
