Business News - January

Could You Up The Ante When It Comes To TAX Efficiency?

Moore Thompson accountants are asking local individuals whether their tax saving strategies are as efficient as they could be.  There are a number of ways employers can alleviate taxation for their employees, at little or no extra cost to themselves.  On a more personal level, individuals can reduce the amount of tax they pay by implementing minor adjustments to their lifestyle.

With increasing focus on the Arctic Systems case, in which a husband and wife business team had ‘shifted income’ between them, and were subsequently handed a tax bill for £42,000, the Government is working hard to fill in what it believes to be ‘tax loopholes’.  Whatever personal views on tax are held, it is a legal requirement of this country, and must be paid.  However, there are a number of perfectly legitimate ways of reducing a tax bill significantly, without the added worry of a hefty back dated bill looming in the future.

For business owners there are a number of strategies for tax free trading including, again only where legally appropriate, gambling.  A source of income can be gained (or lost, as there is a large element of risk involved) by spread betting.  This involves betting on whether share prices will rise or fall.

For the more risk averse business owner, other strategies can be implemented.  Offshore trading, for example, if the correct provision is made, can be financially beneficial, and is even easier if you actually move to be resident in the non-UK country from which you hope to trade.  Another alternative is commercial occupation of woodlands.  Profits made from owning an area of woodland is not taxable, and therefore could make a sound, if long-term, financial investment.

For staff, there are a number of benefits that can be offered by an employer, that are not subject to tax.  Childcare contributions, for example, can be offered to employees at up to £55 per week, tax free.  If your workplace does not have a car park, an employer can pay for nearby car parking facilities without it being taxable.  Similarly, certain home working or relocation costs can be covered and schemes such as long-service awards or financial reward for suggestion schemes all have a monetary ceiling before the funds are liable to taxation.

Managing partner Mark Hildred explains:  “The UK Government is clamping down on tax avoidance, but there are ways of reducing tax bills without refusing to comply with legislation.  Tax is a complex area of finance, and so there will always be several ways of approaching the issue.”

For more information contact Moore Thompson on 01775 711333.

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