10 Steps to predictable, lower tax bills

It’s amazing how many business owners are not advised of their tax payments in advance. This includes dentists. 

The shock and anxiety an unexpectedly large bill can cause is avoided when your accountant follows this annual tax planning process:


1. Review of your family goals

An accountant looking to make a difference to your life reviews your family goals with you every year. They consider your tax position to ensure you keep every penny possible to fund these goals, rather than passing unnecessary money to the Taxman.

2. Plan your expenditure

Your accountant discusses any upcoming business purchases you intend to make, such as office furniture and equipment. They advise whether you should make these purchases before or after your year-end in order to maximise tax efficiency.

3. Pension planning

Your accountant discusses pension payments which can be made before the end of the tax year to reduce your tax bill.

4. Capital Allowance planning

Your accountant ensures you are making full use of the Annual Investment Allowance (AIA) which gives 100% tax relief on certain capital expenditure e.g. equipment, vans. The maximum AIA in any one year is currently £200,000 and your accountant ensures you use as much of this allowance as possible.

5. Review your business structure

Your accountant reviews your business structure and considers whether your tax position will be improved by incorporating, forming a partnership or even dis-incorporating to trade as a sole trader.

6.  Review your year-end date

Your accountant considers the opportunity to change your accounting year-end in order to push back your tax payments with you. This review is especially important should you be
experiencing cashflow issues.


7. Produce your accounts quickly

Your accounts show your business profit. It’s this figure, adjusted for tax purposes, on which you pay tax.

So the quicker your accountant produces your accounts after your year-end, the quicker you see your business profit. And the quicker the level of tax you will need to pay can be calculated.

Ideally your accountant produces your draft accounts within 20 working days of receiving your books and records.

8. Forecast your upcoming tax bills

Once your accounts are finalised your accountant provides a tax forecast showing your payments for the next three years.

9. Post year-end tax planning

Your accountant reviews ways to further reduce your tax bill during your accounts review meeting.

This involves:

• raising potential opportunities to reduce your liabilities
• reviewing your personal remuneration arrangements (how you extract income for yourself from your business)
• helping you take the actions you agree

10.Review your payments on account

Your accountant discusses the results you expect to generate during the coming year, before reviewing your payments on account for the next January and July.  If your future profits are
expected to fall, you can claim to reduce these payments.

This tax planning process benefits the dentists we work with hugely. It helps them plan how much money they need to put aside each month so paying their tax is never a challenge.

If you want to avoid the stress which comes with nasty tax bill surprises, make sure your accountant follows this process for you too.

If you’d like to discuss how this process can help produce predictable, lower tax bills for you call me on 01249 712074 or email me at tim.hibbert@cvag.co.uk. I’ll be pleased to discuss this service with you.
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Original Article: 10 Steps to predictable, lower tax bills
Clear Vision

About Clear Vision

The traditional method of setting goals and gauging the success of a dental business does not automatically provide you with what you need and want. As the dental business owner, it puts you last in the queue. Clear Vision believes that your business should deliver the lifestyle you want. So when you work with our friendly and vibrant team of accountants and business advisers, it starts with you. What you want. How you want to create a difference in your life. Tell us your goals and we’ll work to help you develop a strong, positive dental business which delivers the life you want for you and your family. We have worked with dentists all over the UK since 2001. Dentists who share the same challenges and issues as you. And we’ve seen what factors will really make the difference in improving your results and increasing your rewards. So you benefit from what we know works and doesn’t work. For a taste of the insights we share check out our blog for dentists: www.clearvisiondentalblog.co.uk. We’re ready to share our experience and insights with you. Simply call our friendly team on 01249 712074 for an informal discussion. You’ll have our ear, our understanding and the considerable expertise which comes from successfully improving the lives of dentists like you.