Tax saving tips every small business owner should know

Becoming a business owner is one of those career paths that almost everyone wants to pursue nowadays, mainly because it offers financial independence and the freedom to grow at their own pace. However, the job of managing a start-up is far from being relaxing and many young CEOs soon discover that independence comes at a cost. On the one hand, stress is a considerable issue. You have to be organized, streamline processes and take strategic decisions to grow your business and surpass competitors. On the other hand, financial issues can drag you down, particularly taxes. Sadly, many enthusiastic entrepreneurs are discouraged by the financial burden of taxes and some even end up closing down their businesses because they do not know how to handle taxes. Nevertheless, there are many tax-saving solutions, even for inexperienced small business owners.

Are you paying too many taxes?

In the United Kingdom, there are several situations that entitle business owners to have their tax returned. The two major criteria on which rate relief is calculated are the number of properties owned and the value of the owned property. Thus, if you use only one property and its value does not exceed £12,000, then you are eligible for a tax refund. Its value ranges from 0% to 100%, depending on the value of the property. Thus, if the property in use is valued at less than £6,000, you can get a complete refund. The more the value of the property increases, the more the amount of the rebate decreases. Do you have more than one property? You might still be eligible, because tax returns for small businesses are calculated using different metrics. To get an estimate of what you can expect, use a tax rebate calculator 2015 or contact a tax expert.

Learn about rural rate relief and work from home relief

Few business owners know this, but a rate relief can be obtained if you work from home or if your business premises are in a rural area with a population under 3000 inhabitants. Return rates vary between 50% and 100%, but note that not all businesses are eligible. For example, rural rate relief only applies for local councils, small shops, post offices and petrol stations. Of course, some restrictions apply and the percentage varies from business to business, so make sure you contact a professional company such as Tax Returned for bespoke advice.

Charities and tax rebate

In the UK, if a property is used for charitable purposes, the business is entitled to a tax rebate of up 80%, but certain terms and conditions do apply, so you have to discuss this matter in detail with your local council in advance.

Keeping track of all these tax relief criteria can be quite a hassle, especially if you already have plenty of other responsibilities. To make sure you aren’t paying more than you should, work with a professional accountant or tax expert. Although some business owners want to do their own taxes, hoping that this will save them money, it is much safer and more effective to resort to paid, but professional consultancy.