Accountant Urges Local Firms and Individuals To Take New Year Look At ‘Taxability’

A SHROPSHIRE and POWYS accountant is urging businesses and individuals to make a New Year’s resolution to save themselves money by going through his free taxability guide.

Rob Ellis, a tax expert for Welch & Ellis accountants, who lives in Llanfechain and works from his office in Willow Street, Oswestry, believes whilst many people make resolutions around making more money in the New Year, many overlook the fact they could easily be saving money with better tax planning and advice.

Rob Ellis explains: “At this time of year, people are often under a huge amount of pressure due to the cost of Christmas and also the fact they have to get their tax return in by the end of January – so all they see is money potentially going out of their accounts.

“A lot of new clients tell me their main concern or resolution for the New Year is simply to work harder and earn more and more money.”

“However, I often find when I look at everything they are doing, with a few simple changes they can save themselves a significant amount of money in tax – and it can often be done by changing very simple things which they can sometimes do for themselves.”

Now in a bid to help people with their New Year’s savings, Rob has written a free guide to taxability in order to potentially help people save money, simply by answering ‘yes’, ‘no’ or ‘don’t know’ to a series of questions.

Your small business

1. Are you sure you are taking money out of your business in the most tax-efficient way?  Does your accountant review this on a regular basis?
2. If you are a sole trader, have you considered taking your spouse/employees into the business?
3. Have you considered whether there are any benefits from converting partnership/business loans and/or surpluses into personal loans – or vice versa? If you are planning on moving home, have you explored the possibility of taking a business loan instead of a mortgage?
4. If you or your business has made losses, have you made sure those losses are being used to reduce your current tax bills by as much as possible?
5. If you run a one-man-band business (not a limited company), have you made sure there is absolutely no possibility of the Taxman charging you much more money by treating you as being employed by one or more of your best customers?
6. Have you correctly recorded dividend payments by your company on board minutes and dividend vouchers? Do you always time the payment of dividends and bonuses so they fall in the ‘right’ tax year fro you? Have you considered using different classes of shares for company shareholders?
7. If your company invests in Research and Development (‘R&D’) and you would be surprised at the definition, have you planned how to make the most of the up to 230% (225% until 31st March 2015) effective tax relief?
8. Have you considered saving tax by reducing the amounts of cash held by the company?
9. If your company owns property it rents out, have you fully considered the tax opportunities?
10. If you own any business property, have you maximised the capital allowances you can claim?

Your employees (which include YOU if your business is a limited company!)

1. If you use contract workers and freelancers, have you made absolutely sure the Taxman has no grounds for treating them as your employees?
2. Have you looked at the possibility of motivating and rewarding your staff by giving them share options?

You and your family

1. Have you made a will? Have you updated it recently? And is it Inheritance Tax efficient?
2. Have you made full use of the fact that each of your children and grandchildren can earn up to £10,600 a year as income in 2015-16 (£10,000 in 2014-15) and £11,100 a year in capital gains – completely tax free?

Rob said: “If you go through the check list and have answered no or don’t know to any of these questions then you should be talking to your existing accountant or someone new about it or looking into the matter further yourself if you feel able.”

He added: “As a businessman myself, obviously I would love people to come to me for advice but I see tax as a bigger issue than any one accountant. I would urge people whoever they use for advice or if they do things themselves, to look at this list and see if they are paying more tax than they need to be. After all, we all work hard for our money and we don’t want to be giving it away to HMRC needlessly.”