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3 Quick Business Tax Ideas

1. Business Property Relief

(BPR)

 

BPR is among the most effective tax reliefs at one's disposal, with the possibility of removing the entire value of a business - be it that of a sole trader, partnership or shares in an exclusive company - from the charge of inheritance tax, either on lifetime death or gifts. Numerous conditions are crucial to be met to be able to be eligible for BPR, on which we can advise. We can support you in whatever appropriate steps must be undertaken to rectify the problem prior to the solemn event that could trigger IHT.

2. Capital allowances

 

 CA has the potential to be claimed on an array of qualifying capital assets e.g. machinery and plant, fixtures and fittings (referred to as integral features) and cars. A number of allowances are available, a few of which facilitate an instantaneous decrease in taxable profits of 100% based solely on the allowable expenditure.

Capital allowance claims ought to be maximised where possible, claiming all available allowances and preferably in advance, ensuring one plans the timing of future expenditure to maximise reliefs. Expert advice ought to be sought regarding property sales particularly, purchases, refurbishments and new developments, given HMRC's rather fussy interpretations. If you're unsure whether a planned expenditure may in fact be be eligible for 100% first year allowances rather than long term depreciation charges, then consider contacting us where we can be of service to advise accordingly.

3.  Cash and Profit extraction

 

With the very best rate of tax currently at 45% for a few types of income, it is vital to take into account the most tax efficient method of extracting profits from a LTD Company. For the director/shareholder there are certain means of doing this, including taking dividends rather than salary, company contributions to a pension and taking advantage of the receipt of tax efficient rather than taxable benefits.

For instance, if the timing of dividends can be timed properly, they might be used the subsequent tax year to make sure arising tax liabilities are disbursed in a future period and in turn provide cash flow advantages. For unincorporated businesses even, the prudent timing of business and profit expenses could be altered to make maximal use of taxable income rules as they pertain to Directors in particular.