If you are a company director, and your year-end is approaching, you may wish to consider this checklist of year-end planning opportunities. Whilst the list should provide some assistance, it is only a high-level summary of potential options, and any tax planning you choose to engage us for would be bespoke depending on your strategy and objectives. To find out more or discuss any of the options, please liaise with your usual Williamson & Croft contact.
- Is director/owner remuneration being paid in the most tax-efficient manner and all eligible expense claims (mileage, use of home) being made?
- Have you considered the purchase of any capital items (computers, plant and machinery, vehicles, fixtures, and fittings, etc.) and the timing of such purchases? The Annual Investment Allowance provides relief for the full cost from the date of purchase so planning capital expenditure prior to the company year-end can generate significant tax savings.
- Have you reviewed business activities to check if any are eligible for Research & Development (R&D) Tax Credits? This typically includes projects that have led to the creation of new products, processes or services or modifying an existing product, but the legislation is very broad so worth reviewing with an expert. If applicable R&D Tax Credits are very generous with an extra 130% of applicable costs being tax-deductible and can be surrendered for a cash sum if the company is loss-making.
- Have you considered the timing of staff bonuses in line with the company yearend to get tax relief as early as possible?
- Do you have a spouse that you could potentially transfer shares to in order to extract additional profits or reduce tax liabilities via allowances and different tax rates?
- Are you utilising all exemptions for staff benefits? (Work phone, 0% loans < £10k, working from home allowance, £150pa entertaining, £50 per occasion trivial benefits, parking facilities, electric car charging, childcare, protective clothing, or uniforms)
- Have you considered company pension contributions as part of remuneration planning for directors and employees? The company will only receive tax relief on pension contributions paid before the yearend.
- Have you considered providing benefits as part of remuneration planning? Low emission company cars may only generate a very small benefit in kind liability whilst the company receives corporation tax relief and partial vat recovery, greatly reducing the cost of the car versus obtaining personally.
- Have you reviewed future plans and discussed any significant transactions (buying/selling a business, buying/selling a building or moving office or expanding abroad etc) with your accountant?
- Have you reviewed key supplier accounts to ensure you are receiving competitive terms in line with the level of service? For high-value accounts consider rebate schemes and early payment discounts.
- Have you reviewed any finance arrangements to ensure finance costs are competitive and the facilities meet the future requirements of the business?
- Review any subscriptions to ensure they are still relevant and there is no duplication of services or more innovative products in the market.
As always, if you would like any further information regarding your year-end planning, please feel free to contact our offices by email firstname.lastname@example.org.