Are you minimising your Ltd company’s tax?

By Chris Dawson February 23, 2015 - 7:01 am

Tax PlanningThe end of the tax year is just a few weeks away and my accountant, Simon Witcomb, suggested a few tax planning ideas you might like to consider before it’s too late:

Make full use of the basic rate tax band

If you own a limited company, it is necessary to declare and pay dividends before 5 April 2015, in order to make full use of the basic rate tax band. You can always loan the money back to the company if you do not need it.

Consider the EIS

If you have excess funds in your company, it is possible to pay yourself a dividend, incurring higher rate tax, but using the Enterprise Investment Scheme to recover the tax over four years.

Bring capital expenditure forward

If you are already planning capital expenditure or major revenue expenditure, it is best to incur the cost before the end of your business’s financial year end, so the that tax relief is received as soon as possible.

Top up your pension fund

A contribution to a pension fund will reduce higher rate tax.

If you’ve any other ideas for tax planning we’d love to hear them

  • Lee Pearce
    2 years ago

    If this was QI, the klaxon would be about to off!!

    Try HSBC, i hear they are quite good at this.


  • elvis
    2 years ago

    Top up your pension fund – does this apply to sole traders as well ?

    • Gary
      2 years ago

      Top up your pension fund applies to sole traders. It applies to all taxpayers. If you are a 40% tax payer then for every £600 you put in your pension pot the government effectively will put £400. Remember though that you may pay tax on lump sums you withdraw over a certain figure so depending on your plans and circumstances you may only be differring a tax payment.

    • elvis
      2 years ago

      Thanks Gary, I’ll look into this further. See if I can find somewhere online where I can open a pension fund.

      So the government will put 66% of what I put in, as long as I’m a 40% tax payer?

    • Gary
      2 years ago

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