If this is the first time you’ve ever had to put in a tax return for your new business, you probably have a lot of questions when it comes to working out how much you owe. It’s obviously wise to perform a lot of research if you’re not using a professional accountancy firm, as you could end up parting with far more cash than you need to. At the end of the day, we all want to do our bit to support the UK economy, but your livelihood should come first, and there are a lot of regulations you probably don’t know about at the current time. With that in mind, today we’re going to spend some time looking at the kind of things for which business owners are allowed to claim tax relief. Depending on the size and nature of your company, the amount of money you save could be in the thousands, so it should be clear how important it is for you to pay attention.
How am I such an expert on the subject? We’ll that’s a fair question, so before we begin; I’ll try to give you a fair and honest answer. While I have no official qualifications in accountancy, I have run a number of successful companies over the years, and so I’ve been in your shoes many times before. To be honest, you are always best to employ qualified accounting staff in-house if possible, but I realise that can be a large expense that places a significant strain on your finances, so at the moment, you’re probably making the right move by attempting to deal with the issue yourself. That said; as soon as you can afford to employ accountants, you should do, as this will make your life so much easier.
Claiming Fuel Money
As I’m certain you’re all already aware, you need to keep hold of all the receipts you receive for the business in order to provide evidence for the things you try to get tax relief for. This is very important when it comes to fuel. Whether it’s just for your own car, or even if you have a fleet of vehicles, you can knock this expense off your tax bill without any hassle whatsoever. In fact, you’d be a fool not to, especially if your fuel costs are high. Claiming mileage works for standard employees too in almost any industry such as construction workers, field sales managers or anything else for that matter. Just remember to keep all your receipts in a safe place because if HMRC decide to audit you, you’ll need to get things right to avoid being fined.
Regardless of what your company does to make money, you will probably have to pay for subscriptions to relevant magazines, business services and software etc. This is all tax deductible, and so you need to ensure you include it in the outgoing funds section of your tax return. The government and HMRC both know that subscriptions like this are essential to the running of a modern successful company, so you don’t have to worry about including them to bring the cost of your tax bill down. Just remember not to put anything irrelevant on there, as this could set alarm bells off and encourage the tax man to audit you. How do I know this? I once accidentally included the price of some personal software in with the return from one of my own companies, and pretty soon I was in hot water.
Tools And Equipment
This includes everything from the tools needed to make your products, to the safety gear your staff members need to perform their duties without injuring themselves. Don’t be shy with this one, as you can get away with almost anything. So, if you’ve recently bought some new expensive machinery, or you’re constantly having to refurbish old ones at your own expense, make sure you mention this, as it could reduce your bill considerably. At the end of the day, if you part with more money than is required of you, it’s only your own business that will suffer. Don’t get me wrong, you should aim to pay some tax, but only your fair share. If multinational firms like eBay and Amazon can get away with paying nothing after making hundreds of millions in profit through claiming they’re paying for research, tools and growth techniques, there’s nothing wrong with you doing the same.
Depending on the nature of your company, it might be sensible for you, and your team to attend relevant trade shows, conferences and exhibitions. You’ll be glad to know that all this money can be knocked off your tax bill too, including anything you might spend on food and drink or hotel rooms while you’re away. This is also the case when you decide to travel far to meet new potential customers and clients. So, never pay for anything yourself, put everything on your business credit card and keep all the evidence!
So my friends, now you’ve had some time to read through all those points, I’m confident you’ll be in the best position possible to start researching a little further with a view to discovering more. Admittedly, I’ve only just touched the surface with this post, and there are obviously lots of other details you need to understand before ploughing ahead. Even so, at least everything should be a little less confusing now.
Take it from someone who understands all too well how stressful tax affairs can be, after doing your own books this one time, I can guarantee you’ll never want to deal with this endeavour yourself again. Considering that, you should probably start looking to employ accountants in some capacity straight away. In truth, the best method is to have dedicated team members in-house, as you have their full attention all of the time, but if this isn’t viable for you, just spend some time looking online to find out which are the most respected ones in your local area.