Can you Find it – Business © 2017 THE FULL STORY…PLAN AHEAD FOR AN EARLY CHRISTMAS Published in Can you find it Business Edition on Thursday, December 1st 2015
Christmas is on its way but will Gordon Brown be playing Santa with his Autumn Statement or is it more likely that he will be playing Ebeneezer Scrooge?
According to the latest figures, this year British businesses will pay nearly £8 billion in extra taxes introduced by Labour.* Firms will pay £2.2 billion in taxes on profits, such as corporation tax and capital gains tax, and £5.6 billion in taxes on inputs, such as national insurance contributions, fuel duties and environmental taxes.
The burden of extra tax on companies brought in since 1997 has risen from an estimated £6.3 billion in 2004-05 and £5.9 billion the year before.
But this doesn’t have to be the case, with a bit of planning and proactive business advice the tax system could actually work for your business, instead of costing you money. Many companies are missing out on the tax relief measures that have been introduced over recent years. SMEs (small to medium sized enterprises) were reclassified in April 2015, and in some cases the capital allowance limits have almost doubled. Many SMEs have not realised that they now qualify for extra tax breaks. This means if you have fewer than 50 employees, a turnover of less than £5.6 million or gross assets of below £2.8 million, you could enjoy some significant tax benefits as a result.
Companies with profits below £10,000 pay no corporation tax. If you are near to this bracket, businesses should consider claiming less capital allowances than full entitlement to ensure profits remain as high as possible yet under £10,000 and increase the capital allowances in later years, when there may be tax to pay.
However, companies with profits of less than £50,000 paying dividends to individuals need to be aware of the non-corporate distribution rate. Timing of dividend payments may impact on the amount of corporation tax payable.
If businesses plan ahead and seek sound financial advice from experts, Christmas could be coming early next year.
For more information call Mhairi Charlton on 01228 591000 or email firstname.lastname@example.org
*according to EEF, which represents Britain’s manufacturers