New Year Detax 2024! The must have New Year’s resolutions you need this year - Wilson Partners | Maidenhead Tax Advisors
New Year Detax 2024!
New Year Detax 2024
What we do > SMEs > New Year Detax 2024! The must have New Year’s resolutions you need this year

New Year Detax 2024!
The must have New Year’s resolutions you need this year

Starting a New Year, often our thoughts turn to jumping on those niggling tasks which have been lingering for a while. Quitting a vice, dry January maybe, getting to the gym, making more time for the family – or that most exciting of them all… getting your tax affairs in order! Ok, so it’s not going to make you run faster, but it might help you sleep better!

Many people have a hunch that they might be paying more tax than they need to, but then life and / or business gets in the way and it slips down the priority list, even though that decision could be costing you thousands or even tens of thousands of pounds!

The good news is that as it’s a leap year – you’ve got a whole extra day, so why not make this year the year to get on the case with your tax and make sure you’re not paying more than you need to.

So what’s there to consider?

Business owners

For businesses, there’s a number of areas to be considering:

Corporation tax

With new tax rates coming into effect from 1st April 2023, the CT burden on many businesses is now as much as 25% if they’re making more than £250k profit. If you have more than one company and they are deemed to be ‘associated’ the threshold is reduced. To mitigate the impact of rising tax rates, you could be taking advantage of the 100% first year allowances for investment in new plant and machinery as well as electric vehicles.

Key takeaways:

  • Look into whether you have an associated company and understand your tax liability
  • Calculate your tax liability and make sure you have the cashflow to pay your Corporation Tax bill on time
  • Look at the financial case for investing in equipment and or electric vehicles. Does the potential tax saving warrant the investment?

Click here to learn more about personal tax
Click here to learn more about business tax

R&D tax reliefs

The R&D tax relief scheme has been under the microscope in recent years with changes put in place to ensure these still generous incentives find their way to the right businesses. There are still many businesses out there who aren’t aware that the innovative work they are doing would qualify for R&D tax relief. Whilst innovative projects do not always meet the criteria of R&D for tax purposes, if you have a niggling suspicion that the work you’re doing might qualify, then make sure you look into it. It might just be the difference between success and failure.

Key takeaways:

  • Contact Emma Richards, Innovations Director at Wilson Partners for a chat, to understand whether you might qualify

Patent Box

The UK patent box has been around for over 10 years now and enables companies to apply a 10% rate of tax to profits arising from the patented invention or process. With corporation tax increasing to 25%, businesses eligible for patent box can reduce their tax on eligible profits by 15%. To qualify for patent box you need to directly hold, or have an exclusive license over a UK or EU registered patent, and have contributed to the development of the IP. Patent box is a generous relief with only one patent needed to potentially turn the patent box on in relation to all profits arising from the sale of the patented invention.

Key takeaways:

  • Speak to Emma Richards, Innovations Director at Wilson Partners to explore whether you could benefit from this relief

Get fit for exit

When selling your business, one of the most common obstacles is what’s uncovered during the tax due diligence phase of a company sale. This can uncover potential tax liabilities that you’re not currently aware of that could hugely impact the value of your business.
Secondly, many business owners assume that upon sale of their business that they will automatically qualify for BADR (Business Asset Disposal Relief) only to find out the share structure is incorrect and they end up with a larger Capital Gains Tax Liability.

Key takeaways:

  • Get a tax health check on your business with Wilson Partners to make sure there’s no skeletons lurking in your closet and that you’ll pass even the toughest of tax due diligence processes
  • Get Wilson Partners to look at the structure of your business ownership and advise how to prepare for a sale

Private individuals

For individuals, there’s also a number of areas worth considering:

Company drawings

Historically business owners have taken dividends as their main source of remuneration from their company. Whilst there have been increases in taxation on this method, it is still important to ensure your share structure is in the best place and that you are taking full advantage of the personal allowances available to both you and your spouse.

Key takeaways:

  • Speak to Wilson Partners about how you pay yourself from your company to ensure optimum tax efficiency

Inheritance tax

Possibly the most frequently ‘put off to another day’ task is writing a Will and tax planning, aka preparing for when you depart this world. Nobody wants to think about their demise, but the reality is that if you haven’t prepared for it, it can create a hugely stressful situation for your loved ones and your Estate could end up paying more tax than it needed to. From setting up Trusts, to gifting money to your loved ones, to reorganising your company share structure, there are a number of legitimate ways to mitigate the tax burden on your Estate.

Key takeaways:

  • Speak to Sarah Clarke, the IHT tax specialist at Wilson Partners to get a plan in place

New Year Detax 2024

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