Running a limited company gives you more flexibility when it comes to tax planning. Here are five strategies our accountants recommend to maximise your tax efficiency.
1. Optimise your salary and dividend mix: The most tax-efficient way to extract profits from your company is usually a combination of a low salary (up to the NI threshold) and dividends for the rest.
2. Claim all allowable business expenses: From home office costs to business travel, professional subscriptions to equipment — make sure you're claiming everything you're entitled to.
3. Consider pension contributions: Company pension contributions are a corporation tax deductible expense and don't attract income tax or NI.
4. Plan your corporation tax: With careful timing of expenses and income, you can optimise your corporation tax position.
5. Use your annual allowances: Make sure you're using your tax-free dividend allowance, capital gains annual exemption, and ISA allowances.