Small business and franchise owners need to be on top of their game when it comes to their financial accounting and record keeping. This means working with a trusted accounting partner to help ensure that your business thrives and maintains its legal accounting and financial obligations. With this in mind, it’s important to consider some tax tips for such business owners to ensure you are always on the right side of the law. Let’s explore some of these tips to help you on the road to business ownership and success.
Tip 1: Be aware of expenses that are tax deductible
There are several business expenses that are tax deductible. This means you don’t have to pay extra taxes on them than you have to. Examples of such expenses include business travel, fees for professional services such as accountants and attorneys and certain office costs as well as new or used equipment.
And for those who are wondering are monthly franchise fees tax deductible, it is important to be aware that all franchise business start-ups are similar to any other type of UK business startup. As such, a franchisee will be charged a franchise fee that covers costs such as training and learning materials, equipment, stock and a location finder fee. Since these are all different elements, they will each have different tax classifications.
For instance, equipment and stock will be considered tangible assets while training and learning materials will be classified as intangible. Yet others still may be classified as capital expense items, meaning that each item will need to be treated differently when doing your accounting. In short, although most franchise elements can be claimed as legitimate start-up items, it is unlikely that you will be able to claim back the entire amount spent on capital expenses during your first year of business operations.
Tip 2: Undergo a cost segregation study
For business and franchise owners who have made significant renovations to their business, a cost segregation study can help to accelerate the depreciation of your assets. As such, you may be able to enjoy some tax breaks.
Tip 3: Use a working capital loan to pay taxes
Working capital is essential for the running of your business but apart from operational expenses, it can be used to cover your taxes, too.
Tip 4: Hire a professional
When it comes to franchise accounting, you’ll need to hire a professional to help you with managing your accounts and submitting them on time, while also benefiting from their knowledge and experience in terms of keeping your tax payments as low as possible. This will ensure that you have greater peace of mind and control over your business expenses and tax obligations.
In conclusion: Choosing the right tax accountants in London for your needs
When it comes to self-assessment tax returns and business tax returns, the landscape can get quite tricky to navigate, especially if you don’t have a professional at your side helping to guide you through the process. To stay on the right side of the law and to ensure that you also optimise your expenses and taxes that need to be paid to HMRC, get in touch with us at Tax Navigator to help ensure a smooth and easy tax process that leaves you with greater peace of mind.
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