Personal tax planning

Setting up as a sole trader is more flexible, less expensive and burdensome than setting up as a limited company. However, tax savings through a limited company and protection by using a separate entity outweigh the benefits in the long run.

Advice about your business structure would be one of the very first tax planning strategies we would employ.

There are many legal strategies that can be employed to save tax and efficiently manage your money. As tax specialists, dns will look at all possible strategies and then put them into practice.

Tax planning, whether you are a sole trader or limited company, can save you thousands of pounds. For example, the VAT Flat Rate Scheme can save your business enough money to cover your accountancy fees for several years. Many small businesses, if they paid more attention to their tax affairs, would save considerable sums of money. Unfortunately many businesses are unaware of this and waste the opportunity to save money.

dns employs a number of legal tax-saving strategies.

We advise on:

• Company set-up
• Review of business structure
• Taking money from the business
• Payroll
• Online accounting software
• Management accounts
• Business assets
• Company car
• VAT
• Dispensation
• Tax credits
• Childcare vouchers
• Pensions

There is more information on all these areas in our knowledgebase/tax tips and articles.

You can purchase dns tax planning services by submitting the form and indicating which service you would like. You can use the same form to request information about other services as well. On receipt of the form, dns will contact you.

Yes, almost definitely, we can work with you to ensure you stay compliant but pay the least amount of tax possible. Effective tax planning is done over a period of time, and although we can begin immediately to save you tax, over several years we can minimise your liability. We can also advise you about the best sort of business structure to ensure you pay the least tax and then put in place the structure to minimise your liability.

Year-end planning is not the same as tax planning exactly, although year-end planning is a part of tax planning to the extent that you may look at investing in pensions, taking dividends and looking at share buybacks if your business is in the position to look at that. Of course, a limited company is the best option in terms of tax planning but all the other strategies we can put in place will depend on your year-end planning for greatest success.

Our Gold Company Formation package includes a pre-business set-up tax-planning strategy. This is an integrated service that we offer with full confidence that we will save you all the tax we can. Our standard prices are 25% of any tax we save you.

To optimise your tax planning opportunities it is best to form a limited company, where you will pay corporation tax at a lower rate than paying personal tax through a self assessment tax return as a sole trader. As a limited company there are more ways by which you can take money out of the company: salary, dividends and share buybacks, for example. dns will ensure you hold on to more of your money and ensure you are doing so legally. Go to the dns website knowledge base and take a look at our resources to read some of our informative articles and bulletins.

A company car remains a valuable part of the remuneration package for many businesses, but tax and national insurance costs may mean that you need to consider whether your current arrangement represents the most tax-efficient option. The company car or van benefit is subject to a Class 1A national insurance charge of 12.8% payable by the employer. There is also a fuel benefit charge where fuel for private use is provided with the car. The rules also apply to employer provided cars and vans.

The Pre-Budget Report announced a number of proposed changes to the rules. Please go to our knowledge base/July 2011 for more information about the benefits and pitfalls of buying a company car or pool car. dns can help you review your company car policy to determine whether it could be more beneficial to pay employees for business mileage in their own vehicles, at the statutory mileage rates.

Whether or not registering for VAT will be advantageous to your business is very much dependent on the sort of business you run. Sometimes it can be a very good idea despite the increase in paperwork, but it is advisable to get advice from a tax expert before making the decision. Please go to VAT FAQs for more information on VAT.

The VAT Flat Rate Scheme can reduce the time spent on accounting for and working out your VAT because even though you still need to show a VAT amount on each sales invoice, you don’t need to record how much VAT you charge on every sale in your accounts. Nor do you need to record the VAT you pay on every purchase. Another incentive is in your first year of VAT registration to the flat rate scheme, you can take advantage of a one percent reduction in your flat rate percentage. To read more about VAT and the advantages and disadvantages of the Flat Rate Scheme go to VAT FAQs and see articles in our Knowledgebase/February 2011.

Every company must submit a P11D form for the period 6th April to 5th April each year to HMRC to record expenses and benefits, the latter of which is liable to tax and NI. If dispensation is in place, however, you are not obliged to report on a form P11D for reimbursement of your expenses. However, for dispensation to be an effective tool, you should make a rule to never pay for private benefits through your business because if you do you will have to fill in a P11D. To read more about Dispensation please visit Dispensation FAQs.

Ideally you should take salary to your tax-free maximum per annum and talk to a tax specialist as to whether you should operate salary sacrifice, dividends or look at share buyback as an option.

Share buyback can be a very useful tax planning opportunity; it is not for all businesses and can backfire if you do not take appropriate advice. Read our article in the knowledgebase/July 2011 for more information on Share Buyback.

Many people are eligible for tax credits and do not realise it. dns offer a tax credits service but we can look at your eligibility as part of our tax planning service. For further information about tax credits please look at our tax credits FAQs.

dns can advise you and your business about childcare vouchers and there is an article in our knowledgebase/tax tips and articles about changes in legislation. See the article on changes to the childcare voucher scheme in our knowledge base/resources.

dns can certainly advise you about pension planning and this is a very important part of our tax planning strategies. For our clients with £100K of assets we can offer an introduction to our strategic partner Mattioli Woods, for other clients we can certainly put you in touch with other partners that will advise you independently of your best options.