Steer issue 23 June 2019 - Page 16

Tax planning tips
for the growing business
Tax is complicated and not just for new business owners.
Here are a few simple principles of effective business
• Allowances and Reliefs - Whether a sole trader or
company director the simplest way to minimise a tax
liability is to ensure you are claiming for all allowable
expenses (car lease, office costs, professional fees)
Costs such as the proportion of household bills for
the use of your home office are often overlooked. Sole
trader BTL are now losing the ability to claim relief on
what is usually their largest expense, the cost of lending
i.e. mortgage interest. Other businesses may benefit
from lesser known reliefs such as Research and
Development Allowances, Pension Contributions.
• Corporate Structuring - Incorporation, here we can
look at changing from a Sole Trader to LTD Company,
separation of legal identities. Husband and wife can
set up dual allowances. Section 28 of the Corporation
Tax Bill 2010, now 20% reportedly reducing to
17%. Whilst Corporation Tax is chargeable on profits,
businesses with genuine growth strategy and the
associated spending, this will reduce the taxable profit
on the company. LTD Company structures also offer the
ability to “turn off the tap” when it comes to attributing
funds to an individual triggering a personal tax liability.
• Trusts - Many owners of family businesses have found
benefits in placing the Company Shares into Trust. If
properly administered, a Trust can offer asset protection
benefits in the face of insolvency whilst the business is
under your control.
• International Structures - With HMRC’s recent actions
of deploying punitive new tax regimes retrospectively,
many business owners are beginning to feel vulnerable
that the sector their business operates in could fall
victim to the next ill thought out measures aimed at
gaining popularity among the electorate. With that in
mind it’s no wonder that with the growth of a business,
many will opt to branch out to overseas territories.
This step should not be taken lightly and requires expert
• Advice - The line of separation between use and
abuse of tax legislation is slim. UK tax law is among
the most complicated on earth. Business owners should
be concerned with the running of the business for profit
and improvement in their lifestyle. Trying to gain
enough knowledge for a DIY approach to tax planning
will not only detract from the success that has led you
to this point but could result in unfitting or even illegal
results. Take the stress time and margin for error out
and leave it to the professionals, with the recommended
Personalised Legal Advice route.
• Planning the Exit - Whether for natural succession of
the family business or if you choose to reward your hard
work by selling up to run to the sun, a properly defined
and pre-planned exit strategy can make a huge
difference. Entrepreneurs Relief and Business Property
Relief (BPR) to name a few.
Ascendancy offer a full range of bespoke tax
advice, tailored to your circumstances.
If you would like a conversation with one of our
professionals’ call 01227 825 949
or email


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