How to reduce your business tax bill (and I’m not even an accountant)
Seeing your first pennies roll in as a business owner is a rewarding and exciting time. You finally get to eat the fruits of your labour and yep, they taste good.
However, once your tax bill comes in you soon realise all that gorgeous profit could be eaten up and the business will have nothing to show for that big outlay you just made.
It is also important to keep in mind that, although dedicating a large proportion of your profit to fill your pockets may give short term gratification, you could ultimately be doing your business more harm than good.
Yes, you do need to put food on your plate, but, look at where that money is coming from, and, more importantly, where it’s going to.
I often advise business owners to look at reinvesting as much of that potential payment to HMRC as possible back into the company so here are a few reasons why wisely reinvesting money back into your business is the key to growth and success this year and can save on your tax bill.
Honey, it’s back on the beans again
As a small business, you can deduct certain costs accumulated from the everyday running of your business from your taxable profit. These range from office supplies, stock, travel, and staff uniforms to the ultimate reinvestment – marketing and advertising. This means that by making the smart decision to build a new website, or improve on your current one, run a marketing campaign, Facebook ads, Instagram campaigns, or design a new logo, you can not only improve your online presence, attract more customers and therefore give your competition sleepless nights.
I’m the International Head of Making Stuff Up
When building your own business, there comes a point when outsourcing is a necessity. While you may have your head screwed on when it comes to presenting your passion, nobody expects you to be a Jack of All Trades – accountant, award-winning designer, marketing maestro at the same time. By investing in a professional to take over the areas you’re not so confident in, such as WordPress development or running social media campaigns, you can dedicate more time to focusing on the all-important nuts and bolts of your company and concentrate on what you do best.
Taking the moonshots
Those gooroos say that the only time to stop reinvesting is when you are content with where you and your business stand, which (as many entrepreneurs will no doubt agree) is rarely the case. When it comes to putting money back into your company, especially in terms of online advertising and marketing, you need to take the moonshots, look at where your crowd hangout and understand the notion of ‘you get out what you put in’.
So, if you’re yet to conjure up a resolution for this year, how about a change in focus? Instead of licking your lips at how much profit you’ll potentially make this year, look at it from a different angle – reinvested money doesn’t have to be considered spent money, rather a step in the right direction towards your unique business goals and, potentially, reduce that frustrating end-of-year tax bill that swallows up all your sexy profit.
Get in contact with Point and Stare today to see how we can help you reduce your company’s tax bill.