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Seven Key Tax Planning Points for SMEs To Watch

Developing the right knowledge and strategies ...


Posted by Helen Beaumont on 29/11/2023 @ 8:00AM

It's important for business owners to understand the intricacies of tax planning for their small and medium-sized companies. With the right knowledge and strategies, SMEs can save money and stay compliant with UK tax laws ...

Remember, effective tax planning is not just about minimising your tax liability!

Remember, effective tax planning is not just about minimising your tax liability!

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I believe there are seven key tax planning points that everyone should be aware of. From maximising tax efficiency to staying up-to-date with HMRC policies, these points will help you make the most of your tax planning efforts.

Effective tax planning can help you save money, stay compliant, and ultimately, improve your bottom line:

  1. Know Your Tax Obligations

    The first step in tax planning for SMEs is to understand your tax obligations. This includes knowing which taxes your business is liable for, such as corporation tax, value-added tax (VAT), and employer's National Insurance contributions.

    It's also essential to keep up-to-date with any changes in tax laws and policies to ensure compliance.

  2. Maximise Tax Efficiency

    Tax efficiency is all about minimising your tax liability while staying within the boundaries of the law. As an SME, there are various tax reliefs and allowances that you may be eligible for, such as research and development tax credits, capital allowances, and the annual investment allowance.

    It's crucial to work with a tax adviser to identify which reliefs and allowances your business can take advantage of to maximise tax efficiency.

  3. Plan for Capital Gains Tax (CGT)

    If you're planning to sell your business or any significant assets it owns, you need to consider the potential capital gains tax implications. CGT is a tax on the profit made from selling an asset, and it can have a significant impact on your business's finances.

    However, there are various reliefs and exemptions available that can reduce your CGT liability. It's crucial to plan ahead and seek professional advice to ensure you're taking advantage of all available options.

  4. Consider Employee Benefits

    Offering employee benefits can be a tax-efficient way to attract and retain top talent. These benefits can include pensions, health insurance, and share schemes. By providing these benefits, you can save on your employer's National Insurance contributions, and your employees may also benefit from tax savings.

    It's essential to review your employee benefits regularly to ensure they are still relevant and cost-effective for your business.

  5. Understand VAT Rules

    VAT can be a complicated area for SMEs, with various rules and thresholds to consider. It's crucial to understand which goods and services are subject to VAT and at what rate. You also need to keep track of your VAT threshold, which determines whether your business needs to register for VAT.

    Working with a tax adviser can help you stay on top of your VAT obligations and ensure you're not paying more than necessary.

  6. Make the Most of Tax Deadlines

    Missing tax deadlines can result in penalties and interest, which can be costly for SMEs. It's essential to stay organised and plan ahead to ensure you meet all tax deadlines. This includes deadlines for filing tax returns, paying taxes, and claiming reliefs and allowances.

    By staying on top of these deadlines, you can avoid unnecessary penalties and keep your tax planning on track.

  7. Stay Up-to-Date with HMRC Policies

    HMRC policies and procedures are constantly changing, and it's crucial to stay up-to-date to ensure compliance. This includes keeping track of any new tax reliefs or allowances that may benefit your business, as well as any changes to tax rates and thresholds.

    Working with a tax adviser can help you stay informed and ensure your tax planning strategies are in line with HMRC policies.

By understanding your tax obligations, maximising tax efficiency, and staying on top of deadlines and HMRC policies, you can save money and stay compliant with tax laws.

It's always advisable to work with a tax adviser as they can help you navigate the complexities of tax planning and ensure your business is making the most of available opportunities.

Remember, effective tax planning is not just about minimising your tax liability, it's also about maximising your business's profitability and growth.

Until next time ...



Would you like to know more?

If anything I've written in this blog post resonates with you and you'd like to discover more about tax planning for your small business, it may be a great idea to give me a call on 01908 774323 and let's see how I can help you.

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About Helen Beaumont ...


Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.