Tax planning, In a nutshell – expert advice from Shane Cann at Bush & Co Chartered Accountants.Click here to view the transcript
The shorter term plans tends to have less planning options as they must be actioned immediately, and not all business owners have the time to ask the question.
“Where do we want to be in five years? What do we want the business to look like?”
The medium to long term planning that takes place requires broader consideration as there will be more issues to take account of.
When considering any planning for your business, it is important to consider the tax ramifications however it is more than likely that the medium to longer term planning will benefit the most from good tax planning.
Tax planning should be carried out to mitigate the tax payable and to ensure that all possible avenues are explored, which will include ensuring the payment date is delayed as long as possible.
Generally tax planning will encompass income tax, corporation tax, capital gain tax and inheritance tax.
Planning can be carried out in relation to VAT, national insurance and stamp duty however this is less common.
An optimum time to carry out tax planning is when a business is starting up or restructuring, the aim within this scenario would be to ensure the tax consequences are presented with the operational considerations, as getting this wrong can severely effect your business.
By carrying out tax planning, you can either avoid excessive cash outflows or at least predict when they’ll occur. Without this planning, the tax payments could severely hinder your businesses’ progress.
Effective tax planning, can and should give your business a competitive advantage.
The increased cash that the business has available could be used to invest in other areas of the business or simply to increase the working capital that the business has available.