Everyone knows that business is currently incredibly competitive and it seems that everyone is fighting hard for that sale. Business owners then, rightly, look at their costs and try to drive down overheads but there still seems to be one cost that is being overlooked.

If you consider your tax bill a cost rather than what you have to pay you may question the amount. What I find surprising is that I am still regularly seeing new clients who are paying too much tax. If you consider what a significant part of your profit your tax bill is, driving this liability down is key to being competitive.

Look at the expenses on your last profit and loss account and look at how many other costs are more than 20% of your profit. To give you a typical example a couple, sticking with tradition we will call them Mr & Mrs Smith, came to see me the other day running a business as an independent retailer. They had taxable profits of £40,000 with no other sources of income the husband and wife had a combined Tax & NIC bill of £7,700 per year. Using all the legislation available the correct amount of tax due on their profits could be £5,200 and due to their specific circumstances I could actually reduce it further to £2,600.

The legislation is there to be used. HM Revenue & Customs will gladly receive Mr & Mrs Smith’s returns perfectly correctly filled in and with their payment of £7,700. Being a good accountant and tax adviser is not simply preparing accounts and filling in forms correctly.