Running a small business comes with many financial responsibilities and taxes are one of the biggest. While they can feel like a heavy burden, smart tax planning can help lighten the load. By taking advantage of tax-saving opportunities, you can reduce your liabilities and keep more of your hard-earned profits.
At Purple Accounts Warrington, we specialise in helping small businesses save on taxes by ensuring they take full advantage of deductions and allowances. Plus access to expert support to ensure you are always in control of your finances.
Here are our top five tax-saving tips to help you boost your business’s bottom line.
Tax saving tips
1. Make the Most of Allowable Business Expenses
One of the easiest ways to reduce your tax bill is by claiming all the allowable expenses your business incurs. These are costs that are essential to running your business and they can be deducted from your total income to lower your tax liability.
Key Examples Include:
Office supplies
Marketing and advertising costs
Travel expenses (including mileage)
Utility bills and rent for business premises
Software and subscriptions related to your business
How Purple Accounts helps you:
Our team ensures you claim every allowable expense relevant to your business. We provide guidance on what’s claimable and keep detailed records, so you’re not missing out on deductions that could save you money.
2. Maximise Capital Allowances
If your business purchases assets such as equipment, vehicles, or machinery, you may be eligible for capital allowances. This allows you to deduct a percentage of the cost of these items from your taxable profits, reducing your tax bill.
Key Examples Include:
Computers and IT equipment
Vans and other commercial vehicles
Office furniture
Tools and machinery
How Purple Accounts helps you:
We’ll help you understand which capital allowances your business is eligible for. This ensures that major purchases work in your favour come tax season.
3. Consider Incorporation if You're a Sole Trader
If you’re operating as a sole trader, it might be worth considering whether incorporation (becoming a limited company) could reduce your tax burden. Incorporation can offer tax advantages, such as lower corporation tax rates compared to income tax rates for sole traders.
Key Benefits Include:
Paying corporation tax instead of income tax on profits above the basic rate threshold
Flexibility in how you withdraw income from your company (e.g., through salary and dividends, which may have tax advantages)
How Purple Accounts helps you:
We can assess your business’s financial situation and help you decide whether incorporation is right for you. If it is, we’ll handle the paperwork and set up, ensuring a smooth transition that helps you save on taxes.
4. Take Advantage of Pension Contributions
Contributing to a pension scheme is a smart way to reduce your taxable income while planning for the future. Pension contributions are tax-deductible, meaning they lower your overall taxable income, which can result in significant savings.
Key Points to Remember:
Contributions to personal or workplace pensions can be deducted from your taxable profits.
You can also make employer contributions if you run a limited company, reducing the corporation tax your business pays.
How Purple Accounts helps you:
We’ll help you set up a tax-efficient pension plan - or refer you to our trusted financial advice partner to advise on the best contribution strategy to benefit both you and your business. By optimising your pension contributions, you can reduce your tax liabilities while building your retirement savings.
5. Stay Ahead with Regular Tax Planning
Proactive tax planning is essential for minimising your tax burden. Waiting until the end of the year to address your taxes can result in missed opportunities for savings. Regular reviews of your financial situation and changes in tax laws are crucial to ensuring your business is always tax-efficient.
Key Benefits of Regular Tax Planning:
Identify opportunities for savings throughout the year
Avoid last-minute tax surprises
Stay compliant with evolving tax laws and regulations
How Purple Accounts helps you:
We provide ongoing tax planning services that include regular reviews of your finances and personalised advice tailored to your business. Our goal is to help you stay ahead of tax deadlines and ensure you’re always making the most of tax-saving opportunities.
How Purple Accounts Warrington Can Help You Save
Navigating the complexities of tax planning can be challenging for any small business owner. But with the right guidance and support, you can uncover valuable tax-saving opportunities that help your business grow.
At Purple Accounts Warrington, we offer comprehensive tax advice and planning services designed to keep your business financially efficient. Our local team understands the specific challenges small businesses face and we’re here to ensure you’re fully equipped to reduce your tax burden, stay compliant, and thrive.
From maximising allowable expenses and capital allowances to offering expert guidance on incorporation and pension contributions, we’re committed to helping you save on taxes year after year.
Ready to Start Saving on Your Taxes?
Don’t wait until the last minute to start planning your tax strategy.
The tips in this article are for guidance only and you should consult with a professional.
Contact Purple Accounts Warrington today to schedule a free consultation and discover how we can help your business save more on taxes while staying compliant.
Call 01925 979500 or email enquiries@purpleaccounts.com
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