Strategic Tax Plannning

Tax is now an even more important issue for people running their own business because of the raft of tax changes introduced from April 2010. Top earners have seen income tax rise to 50%, their personal allowances taken away and their tax relief on pension contributions slashed. VAT will increase to 20% from January 2011 and everyone across the board will have to pay more in national insurance as the NIC rates increase from April 2011. It's quite some time since we have seen tax at these levels in the UK but the public finances have never before been so difficult.

With the current state of the public finances these tax changes unfortunately are not going to be reversed in the short term.

People running their own business need to respond by developing a strategic tax plan so that, where possible, they avoid the worst impacts of these tax increases. A bespoke solution needs to be developed which complements the needs and ambitions of your particular business and your personal and family aspirations. With good advice and guidance, you and your business should emerge stronger and better off financially if you adopt a strategic tax plan.

Business owners need to look critically at all aspects of the way they operate. Ask yourself:

• Are you making use of all the available tax breaks including the temporary increases in capital allowances?
• Can your business attract tax efficient investment?
• Are you utilising all available tax shelters to manage downwards the corporation tax bill and stay outside quarterly payments?
• What are the tax efficient ways in which staff can be paid to lower what is often the main expense in a business - the wages bill?
• Would a reorganisation of your structure enhance your position by allowing you to reduce legitimately your effective tax rate when extracting profits?
• How do you ensure that you are best placed to maximise entrepreneurs' relief at 10% on a disposal?

Most people in business know just two things about Corporate Tax in the UK - its too hard & its too high. Harwood Hutton, with its new tax partner, Cormac Marum, with more than 25 years experience in tax, can help you to meet these challenges and ensure you have the right solutions to get to grips with tax and lessen its impact.