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Businesses Tax Planning ideas for the year end 5 April 2011

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16 March 2011

Whilst the Government is after every penny it can get to bolster public finances, you should review your tax position to ensure you are paying no more tax than you need to. These ideas are just a sample and are not covered in detail. To talk through your specific circumstances please speak to your usual Hazlewoods contact.

1. Make sure you qualify for Entrepreneurs’ Relief (ER) for CGT - worth up to £900,000
The benefits of ER increased dramatically following the Emergency Budget last summer. You should make sure that well in advance of any potential sale of your business you qualify for the relief. If you would like a copy of our factsheet on ER please speak to your usual Hazlewoods contact.

2. Review your business structure
If you run your own business it may be worth reconsidering the structure of it. The main choices are:

  • Sole trader;
  • Partnership;
  • Limited Liability Partnership (LLP); 
  • Limited company
  • Partnership and limited company 
  • LLP and company

Although you probably considered the tax efficiency of the structure of your business at the time you started trading, it may be worth revisiting it, especially with rates of personal tax and NIC increasing whilst rates of corporation tax are reducing. Any decision about the structure of your business will be complex and there will be non tax issues to consider too. Therefore specialist advice should be sought.

3. Deferral of taxable profits
When transactions are being carried out at or around the year end it may be worth considering whether it is more tax efficient to defer or advance income, gains or revenue or capital expenditure (as long as it can be done legitimately).

4. Maximise your ability to get full Business Property Relief (BPR)
BPR can remove a person’s business interests from charge to IHT. As with all reliefs there are conditions that apply, so make sure you qualify. If you would like a copy of our factsheet on BPR please speak to your usual Hazlewoods contact.

5. Make the most of the £100,000 Annual Investment Allowance (AIA)
Businesses can currently get 100% tax relief on their first £100,000 of capital expenditure on most plant and machinery. This will be reduced to £25,000 from 6 April 2012 so make the most of it whilst you can.

6. Consider introducing childcare vouchers
The rules are changing, so if you haven’t already got a scheme you should consider setting one up before 6 April 2011.

7. Claim loss carry backs as soon as possible to get refunds
If you have a forecast tax loss then you can claim this loss back to obtain a refund from HMRC of the corresponding amount of tax suffered in the preceding accounting period. The quicker you finalise your year end accounts and tax return the quicker the claim can be made.

8. Check you don’t run out of time for making claims
Claims for R&D tax credits, capital allowances and loss carry backs are all time limited, so make sure you don’t miss out on these potentially lucrative tax claims.

9. File VAT returns monthly where repayments are due
If your business’s VAT returns are consistently generating repayments it may be worth considering filing VAT returns monthly to speed up the receipt of repayments. Before opting for monthly returns you need to consider the increased administrative burden of such a change.

10. Check your record keeping
HMRC are becoming more targeted in their approach to tackling tax avoidance and evasion and good record keeping is essential. If you realise you have made an error speak to your usual Hazlewoods contact, as it could be worth taking advantage of one of the available disclosure opportunities.