As we step into the year 2024, the most opportune time for nearly every enterprise would be to reassess the corporate tax strategy. Be it a small-sized enterprise that you run or manage a large corporation. It is always basic to navigate through the nuances of tax planning. With proper planning, liabilities can be avoided, penalties can be evaded. You can utilize all sorts of tax relief that may be available.
In this guide, we’ll explore key tips to optimise your corporate tax strategy in 2024, helping you make more informed decisions. If you’re seeking expert advice. Don’t hesitate to consult a trusted tax advisor like those at Elland Accountancy LTD, who specialise in corporate tax matters.
1. Review Your Business Structure
One of the very first things is checking to see if your current business structure still works well for you. Tax varies with limited companies, partners, and sole traders. Sometimes, it can be beneficial to change your business structure to get more advantageous tax rates or better access to reliefs and deductions.
Why it matters: The structure of your business affects your tax liabilities directly. For example, a company limited by shares makes it much easier to get flexibility on tax planning than being a sole trader. And to discuss whether restructuring is worth it, you may work with a qualified tax advisor.
2. Take Advantage of Allowances and Reliefs
Every tax year, there are new opportunities to take advantage of allowances and reliefs that can reduce your overall tax bill. In 2024, these may include capital allowances for machinery, equipment, and even some environmental investments.
Tax reliefs to watch for:
– Annual Investment Allowance (AIA): This allows businesses to claim 100% tax relief on qualifying capital expenditure up to a certain limit.
– Research & Development (R&D) Tax Credits: Companies that invest in innovation can claim R&D tax relief, a valuable incentive for cutting-edge businesses.
Utilising these allowances not only saves money but can also stimulate future progress. A well-versed tax advisor can pinpoint the specific reliefs applicable to your industry. You can learn more about what allowances may apply to your business by visiting Elland Accountancy LTD, who offer specialised services in corporate tax planning.
3. Plan for Pension Contributions
Pension contributions can be a tax-efficient way to reward yourself or your employees, also reducing taxable income. Employer contributions to workplace pensions are also deductions against business expenditure, which serve to reduce your corporation tax bill.
Tip for 2024: Consider making the most of pension contributions before the end of the tax year to maximise savings. This requires careful planning, as you will need to keep within the limits of your annual allowance.
4. Compliance with Changing Tax Regulations
Staying updated with the latest tax regulations is essential for avoiding costly mistakes. In 2024, we can expect updates to corporate tax rates, allowances, and VAT rules. All of which could have a significant impact on your business.
Work with a tax advisor: By consulting a tax expert, you always know the latest rules to which you must comply. You may change your strategy and benefit from new regulations as soon as they come into effect.
5. Explore Tax-Efficient Ways to Extract Profit
How you extract profit from your business will determine how much tax you’ll need to pay. Options such as dividends, bonuses, or salary payments each have their own tax implications. In some cases, paying yourself through dividends may offer a lower tax rate compared to a salary, but this will depend on your individual circumstances.
Professional advice is key: your tax advisor will be better placed to suggest what works best for you, providing suitable balance to tax efficiency and long-term planning.
6. Plan for the Future with Inheritance Tax and Succession Planning
If you’re planning for the long-term future of your business, it’s important to consider inheritance tax and how your estate will be handled. Succession planning and gifting shares in a tax-efficient way can help protect your legacy while minimising future tax liabilities.
This area of tax law can be complex, so seeking the expertise of a tax advisor is essential.
Elland Accountancy Are Here to Help
Optimising the corporate tax strategy for this year 2024 is not rocket science. Everything starts with reviewing the business structure, making use of allowances and reliefs and then keeping compliance with new regulations. That is the way you can create a strategy that not just minimizes your tax bill but also sets up your business for future success.
If you want to be absolutely sure that your business is fully optimised, consider partnering with an experienced tax advisor from Elland Accountancy LTD. Their tailored advice can help you navigate the ever-changing tax landscape with confidence.
