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Financial issues that keep you awake No.2 – Being as tax efficient as possible

Trying to be as tax efficient as possible is a big concern keeping business owners awake.

 

That’s according to KPMG’s survey of 250 business leaders, where it placed 2nd on the list of financial issues depriving entrepreneurs of sleep.

 

10.9% said it is a current issue but haven’t addressed it yet.

 

28.9% said it was a current concern they’re working to resolve.

 

25.9% had it as a previous concern, now resolved.

 

So out of all 250 respondents, only 34.2% didn’t worry about being tax efficient.

 

It seems a bit strange too, as other tax-related concerns, such as filling out tax returns correctly and on-time are considered a very low priority issue.

 

I think the problem here isn’t so much the businesses not being tax compliant, but just feeling that they’re paying too much tax.

 

They could be in the wrong tax bracket, or know they’re missing out on certain tax breaks that would save them a lot of money.

 

Without bringing it up directly, there are many accountants who probably wouldn’t think to go the extra mile and research how a client could pay less tax.

 

They’d just believe that keeping the client tax compliant was enough, and that would constitute “doing their job”.

 

If you feel this is the case, then maybe your accountant isn’t right for you.

 

A really good accountant should use their experience to know what relief you could be entitled to.

 

Depending on the size of your business, it’s geographical location, and the industry you trade in, you could be paying incorrect business rates to your local council.

 

Would you know if you qualify for tax relief through capital allowances, research and development, or by being considered part of the creative industry?

 

Many don’t, and end up paying too much.

 

One of the case studies on the report is from a happy business owner who got a second opinion: “We changed from LLP to LTD as format was resulting in extremely high tax bills. Suggested by new accountant and the new structure suits our company much better.”

 

Which goes to show, it can’t hurt to ask.

 

And if your accountant can’t help, perhaps find one that can:

 

https://www.madenotborn.com/accountancy/

 

David

Confused by the budget?

It’s a practical advice day today.

 

After the budget announcement yesterday, it looks like National Insurance contributions for self-employed workers will go up.

 

This is obviously not good news for small business owners.

 

However, apparently any business losing their small business rate relief will benefit from a cap, which prevents the rate they pay from going up by more than £50 per month.

 

This is only being introduced of course to try to placate those hit hardest by the recent increase in business rates.

 

That’s not all – income tax allowances for the self-employed will be increasing come the new financial year.

 

So would you be better off, or not?

 

It can be hard to see how the overall picture will affect you and your business.

 

In times like this it might be better to consult a professional, who’ll have seen it all before.

 

You’ll need a good one though.

 

Here’s where to find one, with our list of questions to ask an accountant before hiring:

 

https://www.madenotborn.com/accountancy-supplier-form/

 

David