Best Tips to Reduce the Corporation Tax in the United Kingdom

1. Call us today! 01603 552028 | mail@leading.uk.com      Best Tips to Reduce the Corporation Tax in the United Kingdom When you are a limited company, your organisation is going to be responsible for paying corporation tax on the yearly pro?ts that you bring in. These taxes can be quite high, but you will be happy to know that there are a number of di?erent ways you are able to reduce your ?nal tax bill. As such, you are going to need to make sure that you are aware of the di?erent methods of tax relief out there. Throughout this article, we are going to be discussing some of the most e?ective ways that you can reduce the amount of corporation tax you and your business will pay in the United Kingdom. You need to ensure that when carrying out these steps, you are still operating within the guidelines of HMRC, and as such, you should be sure to seek professional advice if you are unsure about anything. Pay Yourself a Tax-E?cient Remuneration Since you are the owner or the director of a limited company, you have the ability to reduce your liability for corporation tax by paying yourself a salary (or a combination of salary and another type of payment) that is allowable merely as a business expense. There are a few di?erent types of remuneration out there, but some are a lot more e?cient than others. This is from a personal and professional point of view. As such, be sure to consult with experts about what these di?erent types are and what the pros and cons of the di?erent ones are. Claim All of the Costs Involved in Making Sales One of the best ways that you can make sure you are reducing the amount of corporation tax you pay is by claiming for a wide range of di?erent expenses that occur as a result of running your business. There are a number of di?erent categories when it comes to expenses, but one of the major and most common is the cost of sales. Sales costs encompass every cost you incur as you are

2. trying to manufacture or buy di?erent products that will eventually be put up for sale. You will also be able to claim for all of the di?erent costs that you incur when you try to market your products and services. Some of the most common costs that you’re likely to incur will include: The price of raw materials The cost of operations The cost of buying di?erent products you’ll use for resale Storage of products as well as distribution and logistical costs Costs for marketing and promoting your products Any discounts you provide to retailers, wholesalers and distributors  Claim All of the Necessary Costs for Overhead Similar to the above, another incredibly common form of expense that you can claim for is overhead. This category is much wider when it comes to allowable expenses, and it will cover every cost involved in the running of your business. These costs most often include: The wages and salaries of yourself and employees Bene?ts for employees like contributing to their pension, insurance and bene?ts Any payments that get made to contract workers, freelancers and consultants The costs involved in communication like broadband charges and telephone bills The amount you are charged for the rental of your premises, as well as maintenance and cleaning costs Energy and utility charges Insurance premiums O?ce costs like the amount you need to pay for stationary and other o?ce supplies Bank charges such as interest on loan repayments Legal fees and other professional fees Travel costs Depreciation for ?xed assets Invest in Programmes for Training and Development Another good tip when it comes to saving on corporation tax is investing in training and development programmes. You can do this in a number of ways, but one of the most e?ective is by paying for courses (external and internal) that will bene?t you and your employees. When you do this, you are going to be able to deduct any related expenses that you incur from your pro?t calculations. There are also a number of other advantages that come with doing this because you are going to be helping your workforce develop and advance. Set Up a Pension Fund for Your Company A great employee bene?t that you can set up for your business is a company pension scheme. This is where both you, employers and employees will all be responsible for making contributions to that pension scheme. Any contributions that you make as an employer will be classed as an allowable expense and, therefore, will be deducted from your business’s pro?ts. Make Investments for Research and Development It is essential that your business makes investments in research and development because, in doing so, you will be making sure your organisation stays on top of the market and the future of your business is secure as a result. Not only that, but there are valuable corporation tax bene?ts involved too. HMRC will allow you to claim tax relief for a number of di?erent costs that pertain to research and development. These include the following: Materials and assets Any overheads that pertain to research space The cost of licences, copyrights and franchising rights Software and the development of software Sta? hired to carry out that research (these costs can be full or partial depending on how much time they spend on research) External research sta? Contracted research services Do You Need Advice on Your Businesses Finances? There are a number of di?erent ways that you are able to reduce the amount of corporation tax that your business needs to pay. If you would like to ?nd out more about what your organisation can do in order to limit the amount of tax you pay, then it might be worth asking Leading UK for some assistance. We will be able to help navigate you through some of the complex guidelines laid out by HMRC. If you have any questions or would like any more information then please do not hesitate to get in touch. By Viv1 | September 19th, 2022 | Industry News | Comments O? Share This Story, Choose Your Platform!          Related Posts

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