Seven Ideas To Save Tax In Downturn
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In uncertain economic times, it is worth bearing in mind that tax can be an
expensive overhead for many of us. And that the current climate presents a
number of opportunities to reduce the burden.
Here are 7 ideas to consider As always, please do speak to us or your
advisers before implementing any of the ideas. There are various pitfalls to
consider and it may be possible to identify other planning oppotunities for you.
1. Tax Refund
Have you invested in a business that has just gone under? Depending on how
the investment was made, you can request for a tax refund on the losses. Please
refer to our October's questions and answers corner via the link below for more
2. Redundancy Tax Trap
Due to the current downturn, you may decide to reduce your headcount. You may
have heard that statutory redundancy payments are exempt from tax. However, do
not take anything for granted. The taxman has mounted numerous attacks on so
called termination payments in an attempt to deny the £30k tax exemption. Seek
3. Tax Efficient Payroll
Rather than reducing your headcount, you may want to trim your payroll costs.
Did you know you could actually encourage your staff to help grow your business
and pay them tax free income?
4. Tax Free Profit Extraction
If you run a limited company with a healthy cash balance, you may want to
extract these cash out without paying the 25% dividends tax.
Have considered how you could use the drop in the value of assets (including
properties) to effectively extract tax free income from your business?
5. Inheritance Tax
Could the current climate be a good time to transfer assets that have fallen in
value into a trust for inheritance tax purposes?
Cash is tight. Why not review your current vat scheme. Should you adopt the cash
accounting scheme? Have you claimed for any bad debt relief? Perhaps your
business model has or is likely to change slightly due to the current uncertain
climate. Should you continue to be fully registered for vat? See our October's
questions and answers corner via the link below for more details.
7. Capital Gains Tax
You may consider selling some assets to release cash.
But before selling, it will be worthwhile checking that the sale won't result
in taxable gains for you or the company.
Bonus Idea -
Payment On Account If you expect your profits to be slightly less next year, why
not review your self assessment payment on account. You could reduce this to aid
About the Author
Jonathan Amponsah BSc FCCA is a UK Tax Expert and the founding partner of
A M P
Associates – A specialist firm of chartered certified accountants and tax
advisers based in London and Surrey. Jonathan advises on a wide range of
business and tax issues and he is recognized for his proactive and innovative
approach to taxation.
Jonathan can be contacted on 0845 009 8845 or email:firstname.lastname@example.org
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Article Published/Sorted/Amended on Scopulus 2008-10-26 19:34:12 in Tax Articles