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Tax saving tips for Individuals and Company Directors as well as a useful VAT section :-
General Tips
Employees
Company Directors
VAT
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 Get your tax return in on time - to avoid a £100 penalty.
Pay the tax on time (otherwise interest is due on late paid tax as well as a 5% surcharge).
Keep all your tax related records.
The Revenue only guarantee to calculate your tax if you get your return to them before 30th September. Otherwise you may need an accountant to help you complete the calculations on your return.
Use an Accountant - The revenue will help you calculate your tax 'correctly' but they do not usually help you to minimise your tax - Would you ask a crocodile to help you across a river.
The revenue has more power to start 'enquiries' and they do not have to give you a reason for looking in to your tax affairs. |
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Check your tax code - Your code would only usually be lower if your company provide you with any benefits (i.e. Car, Mobile Telephone, BUPA etc.)
Keep all your tax related paperwork i.e. Change of tax code forms, End of Year P60 and P11D, and your P45 if you change Jobs (your new employer will need your P45 when you start a new job).
Company Cars can really hammer your tax allowances and leave you with a lot less money in your pocket, the Fixed Profit Car Scheme lets your employer pay you to run your own car.
Mileage Allowances can be set against tax on your tax return at Fixed Profit Car Scheme rates even if your employer pays mileage at a lower rate.
If tax has been deducted on Emergency Tax Code or at Basic Rate there is a fair chance that you could be due for a tax rebate at the end of the year (unless you have more than one job at a time).
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The National Insurance system works differently for directors. NI for directors is calculated on a year to date basis.
If a director leaves an employment where NI has been calculated in the usual fashion, a NI rebate may well be due.
Directors have to pay tax on Benefits in Kind no matter how high or low their earnings (the £8,500 lower limit does not apply to directors).
The Directors Current Account is used to track how much is owed by the company to the directors (or vice versa). Often when a company is formed the directors introduce cash or equipment to the business, the value of which should be put into the directors current account for repayment.
If the Company owes money to the directors it can be paid back without any tax being due (as it is simply a repayment of a loan) and if appropriate should be repaid in advance of salary or dividends.
If the Directors owe money to the company, repayment should be made within 9 months of the year end, otherwise tax is due on the benefit of the loan. |
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Be sure to get your VAT return and payment in on time otherwise you may end up paying interest and penalties.
The first VAT return can be used to reclaim VAT paid on stock held at the date of registration, capital items (such as computers or furniture) purchased before registration and consumables in the six months prior to registration.
Vat can only be reclaimed on vehicles if there are no windows or seats in the rear.
It is only worth reclaiming VAT on motor fuel if there is fairly high mileage, otherwise the scale charges may be higher than the vat reclaimed.
If staff use their own cars and are paid on a pence per mile basis, VAT can be reclaimed at rates agreed by the VAT office
VAT can be reclaimed on gifts of up to £15 per recipient per year.
Staff parties are eligible for VAT relief in full as long as only staff are invited, otherwise the vat reclaim should be made pro-rata.
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