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How To Reduce Your Corporation Tax Bill?
Corporation tax is a type of tax that must be paid by UK limited companies. It is based on the
yearly corporate profits that a business or company generates.
There are various ways to reduce your business taxes. Some of these include:
1. Claim Research and Development tax relief
If your business pays technical staff to solve technical issues, then you can claim a research
and development tax relief. This can be as much as £25k for every £100k that is spent on
innovating.
2. Invest in Plant and Machinery
Any organization can benefit from the Annual Investment Allowance, or AIA. This allows
businesses to claim instant tax relief on purchases of certain business assets.
The limit of Annual Investment Allowance is currently set at £1,000000. This implies
organizations putting resources into qualifying things can discount a lot of the cost against
their benefits.
3. Capital Allowances on Property
Companies can claim a 3% allowance on new commercial building expenditure as of April
2020. Any building bought before this date can review the purchase to determine whether it
qualifies for capital allowances.
4. Claim All Business Expenses
It might appear glaringly evident, yet organizations frequently disregard a few costs from
their accounting records. It’s important to keep a list of all business expenses so that you can
claim them back at the end of the tax year.
5. Pay Owner Salaries
Assuming you are maintaining your own business, don’t forget to pay yourself an ordinary
income. It can be easy to forget that your business is a separate legal entity. So, make sure
that you pay yourself a salary which will reduce your profit. This in turn means that your
Corporation Tax will be reduced.
6. Stay on Top of Payments
If you are capable of pay your Corporation Tax bill early, then HMRC may give you some of
it back in the form of interest on your original return.
7. Pension Payments
Paying into your or your employee’s pensions through a limited company is an allowable
expense. It’s also a tax-efficient way to save for your retirement so it makes sense to make
the most of this tax break.
8. Claim Business Mileage
Assuming you or any of your representatives utilize their own car for business purposes, you
can claim expenses from the company on a tax-free basis.
We can plan and submit charge calculations rapidly and precisely. We are also able to offer
you tax accounting and risk advisory services driven by your core business objectives. Our
tax team can help you address any corporation tax issues, from simple compliance to
complicated tax planning.

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How To Reduce Your Corporation Tax

  • 1. How To Reduce Your Corporation Tax Bill? Corporation tax is a type of tax that must be paid by UK limited companies. It is based on the yearly corporate profits that a business or company generates. There are various ways to reduce your business taxes. Some of these include: 1. Claim Research and Development tax relief If your business pays technical staff to solve technical issues, then you can claim a research and development tax relief. This can be as much as £25k for every £100k that is spent on innovating. 2. Invest in Plant and Machinery Any organization can benefit from the Annual Investment Allowance, or AIA. This allows businesses to claim instant tax relief on purchases of certain business assets. The limit of Annual Investment Allowance is currently set at £1,000000. This implies organizations putting resources into qualifying things can discount a lot of the cost against their benefits. 3. Capital Allowances on Property Companies can claim a 3% allowance on new commercial building expenditure as of April 2020. Any building bought before this date can review the purchase to determine whether it qualifies for capital allowances.
  • 2. 4. Claim All Business Expenses It might appear glaringly evident, yet organizations frequently disregard a few costs from their accounting records. It’s important to keep a list of all business expenses so that you can claim them back at the end of the tax year. 5. Pay Owner Salaries Assuming you are maintaining your own business, don’t forget to pay yourself an ordinary income. It can be easy to forget that your business is a separate legal entity. So, make sure that you pay yourself a salary which will reduce your profit. This in turn means that your Corporation Tax will be reduced. 6. Stay on Top of Payments If you are capable of pay your Corporation Tax bill early, then HMRC may give you some of it back in the form of interest on your original return. 7. Pension Payments Paying into your or your employee’s pensions through a limited company is an allowable expense. It’s also a tax-efficient way to save for your retirement so it makes sense to make the most of this tax break. 8. Claim Business Mileage Assuming you or any of your representatives utilize their own car for business purposes, you can claim expenses from the company on a tax-free basis. We can plan and submit charge calculations rapidly and precisely. We are also able to offer you tax accounting and risk advisory services driven by your core business objectives. Our tax team can help you address any corporation tax issues, from simple compliance to complicated tax planning.