Taxation is one aspect of business many business people dread. Asides from the fact that it can be time-consuming, taxation can have some legal implications when done wrongly. There is also the question of economic efficiency while dealing with business taxation so how you make your business more tax efficient?
Maintain the perfect bookkeeping practice
Your bookkeeping practice will determine to a great extent how you will succeed with your tax liability. Do not wait until return is due before putting your books in order. Keep a good record aand you can capture all expenses and other opportunities to reduce tax burden legally.
Know what credits and deductibles apply to your business
Credits and deductibles are there for you to enjoy, but the government will not remind you of them. It is your responsibility to find this out and take advantage of them.
Smaller personal salary
If you have the perfect company structure, paying yourself and the directors of your company small salary is a good way to avoid bigger tax obligations. Consider the different tax brackets applied to wages and pay what will not attract high NIC.
You can use dividends payment to augment the small salaries of directors in your company. NIC does not apply to dividends and so it is a tax efficient tool for compensating your directors.
Filling your tax return on time is another way to increase tax efficiency. Filling late attracts penalty. Even if you can’t pay the amount you owe, file it and avoid the additional penalty for failure to file.
There you have it! Above are a couple of tips to help you save more on tax. By following all the tips, you can always expect more returns on your tax. They offer you a great opportunity to save on tax legally.