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TAX SAVING TIPS 2021 FOR YOU AND YOUR BUSINESS

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Due to the global coronavirus pandemic, various uncertain things are prevailing in the economy. The consequences of coronavirus shaken the economy, but concerns about finances, health and even jobs have also increased.

Business owners and Entrepreneurs are responsible for paying income tax on the revenue created by their enterprise. It can be a large amount, and they are still on the lookout for deductions and exemptions to minimize their tax outflows.

If you’re self-employed, an employee, a landlord, pensioner, or an investor, there are plenty of ways to minimize your tax bill legally.

Here are the quick tips and tricks that will help you bring more pounds in your wallet by cutting your tax bill.

  1. Maximize your personal savings allowance

If you are a basic-rate taxpayer, you will receive £1,000 interest on savings tax-free. Your tax-free allowance, if you fall under higher-rate taxpayer band, is £ 500. Income that exceeds this threshold would be taxable.

It will not be automatically deducted by the savings provider anymore. You’ll need to pay it by self-assessment or have it removed via PAYE if tax is due. Bear in mind that you may not have a savings allowance as an additional-rate (45 per cent) taxpayer.

  • Transfer assets to your spouse

When you transfer assets to your spouse or civil partner, you get an exemption from paying capital gains tax. So, it might be worth transferring savings & investments to your husband and wife if they pay a lower tax rate than you do.

  • Fulfil the deadlines

Ensure that your submissions with HM Revenue & Customs sent and paid on time. When things don’t go as the way you would like them to be, this isn’t always straightforward, but even when they aren’t, coping with something as quickly as possible gives you & your advisor time to deal directly with them & reduce any fines or interest you can suffer.

  • Capital gain tax (CGT) allowance:

The profit you earn from the sale of certain investments, such as art, antiques, second homes and shares, is called capital gains. In 2020-21, capital gains of up to £12,300 were tax-free.  Civil partners and married couples who hold properties jointly can get a double allowance of £ 24,600.

Always remember, if the usage of allowance is not done during the tax year, an individual will lose it forever.

  • Claim tax-free childcare

You can claim back 25 per cent of your childcare expenses under the tax-free childcare scheme, up to £500 every three months. To be eligible for this, you would need to satisfy certain conditions, including having a child under 11 and earning less than £ 100,000.

Alternatively, an employer launches a salary sacrifice childcare scheme. These are simple to create and can result in considerable savings for employers and employees.

  • Self-employed vehicle costs

 Generally, you can demand the operating costs of a car you use for company purposes (though not the cost of buying one). You will claim a proportion of the overall cost if you use the same vehicle in your private life. For doing this,

  • You need to add up all the motor costs for the year and measure the percentage of business miles you have made,
  • Or you can claim a fixed rate mileage allowance for work travel.
  • Claim for little things

From the last few months, Uk citizens remained at home to help fight the coronavirus’s spread on 23 March 2020. It has indicated that many people need to work from home. You will claim back tax on extra home expenses if this happens to you. For example, if your bills for heating or electricity are rising due to working at home, you can save some money.

If you have to work from home, your employer could opt to pay you an extra £ 6 a week (£ 26 a month) tax-free to cover your added costs. But, if they’re struggling like many firms, you might opt to directly demand back tax relief on the £ 6 of revenue from HMRC.

  • Investment in shares through the business

If your employer offers the right to buy shares through a government-approved scheme at discounted rates, such as the Company Share Option Plan, Share Incentive Plan,  or Enterprise Management Initiative Scheme, the value of shares exempts from income tax and National Insurance.

It’s not entirely tax-free, though. When you do sell your shares, you will undoubtedly need to pay capital gains tax.

Winding-up

If you are still uncertain about paying taxes, then take a step back and talk at the earliest possible opportunity with your tax advisor.

They will ensure that you have thoroughly considered your choices as your trusted business advisor, and will ultimately help optimize and secure your wealth for the long term. Sophia is a full-time financial writer at experlu. she is a passionate blogger and love to share her knowledge on various subject. Content created by Experlu UK– are loved, shared & can be found all over the internet on high authority platforms.

https://experlu.co.uk/

Business

STREAMLINE YOUR BUSINESS FINANCES AND SIGNIFICANTLY INCREASE PROFITABILITY

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Every successful and professional business owner knows and truly understands that there is nothing more important and worthy of investing significant time in than the state of their company finances.

Continue reading to discover how to streamline your business’s finances and subsequently significantly increase profitability and cash flow.

 

Invest In Employee Training Courses and Business Mentors

The initial monetary outlay required to invest in employee training courses and even an in-house business mentor scheme will be quickly absorbed by the overall improvement in employee efficiency and productivity. Training courses will bond your teams, improve their morale and sense of belonging to your company. They should also make every individual worker feel significantly more valued and will open up opportunities for individual progression, promotion and advancement. Both quantity and quality of performance are proven to increase within a business that offers employee training courses and business mentorship.

 

Conduct A Thorough Business Energy Audit

As a business professional, you will be all too aware of the sheer amount of money spent every month on your energy bills. To counteract this and potentially significantly reduce the amount you are paying, you should conduct a thorough energy audit throughout the entirety of your business. Water rates for businesses are far more competitive than one may believe and employing the services of an established and experienced company who can compare and consolidate your energy bills would be exceedingly prudent.

 

Outsource Your IT Operations

Contrary to several business ‘experts’ beliefs, there is never the exact right time to outsource your information technology operations and whenever you make the move you will inevitably need to deal with several unexpected issues. However, the benefits of doing so far outweigh any minor inconveniences you may or may not experience.

There are several crucial questions and polite demands you must make to your supplier and, naturally, your soon-to-be business partner, and it is vital to set out clear goals and targets before you begin. It would be extremely pertinent to source an IT business associate who has as few intermediaries as possible to insure a smooth and problem-free collaboration as well as ensuring your new collaborator is up to date with the very latest in technology that is specific to your industry.

 

Use Payroll Software

There are a multitude of benefits to investing in a company payroll system which include, but are in no way limited to:

  1. Fewer, if any, mistakes regarding paperwork
  2. Ensuring your year-end is as stress-free and unproblematic as possible
  3. Fulfilling your moral and ethical responsibilities to your hardworking employees
  4. Simplifying the overall payroll process from start to finish
  5. Saving significant time and subsequent money
  6. Ensuring you are fulfilling your legal obligations to the government

As your business goes from strength to strength, naturally you will gain a significant increase in the number of employees on your payroll and if your payroll is currently done in-house, there is an increase in the risk of human error the higher the employee count.

 

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Business

HOW SMEs CAN EMBRACE CONTACTLESS, WITHOUT DITCHING CASH

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By Tsuyoshi Notani, Managing Director, JCB International (Europe) Ltd.

 

Already popular, the past year has accelerated the usage of contactless payments in lieu of cash transactions – even for very small purchases. As well as using cards with contactless abilities, the ease of using digital wallets such as Apple Pay has increased take-up across the UK, representing 32 % of online payments[1]. Digital payments have the advantage over notes and coins at point of sale because it facilitates a more hygienic experience and speedier transaction.

Meanwhile, in the UK, the contactless cost limit has been raised from £ 45 to £ 100 for a single ‘tap and go’ transaction, compounding moves by consumers to rely on contactless as the payment mechanism of choice. In fact, Link Scheme Holdings Ltd, which oversees the UK cash machine network reported that the number of visits to ATMs dropped by 43 % for the year to March 2021 on the previous year[2], although it does note that some ATMs may have been inaccessible due to pandemic restrictions.

The appetite for paying without cash is huge – and we know that a large proportion of cashless payments are also contactless. For SMEs this can present a challenge. Providing multiple ways to pay can be an administrative obstacle, and often SMEs prefer to operate with cash only, to avoid incurring additional fees and costs. However, there is good reason to offer digital payment methods alongside cash.

Business benefits to offering contactless payment solutions include reduced costs associated with cash handling, and the convenience for customers in offering multiple ways to pay for goods or services. It is also a very secure way to receive payment. A simple and fast way to transact, contactless is the ultimate convenience for customers. For retailers competing in today’s landscape, it is essential to ensure that customers have access to their preferred payment method.

However, this must not come at the total exclusion of cash until a solution has been found for the ‘unbanked’ – those without access to digital payments for one reason or another. For now, solutions are nascent, and SMEs looking to reach all potential customers would do well to offer cash payments but also enable cashless and contactless. For SMEs who increasingly find themselves faced with competition from mega entities, focusing on a convenient and frictionless customer experience is paramount.

At JCB, we take financial inclusion seriously, recognising our role as a key player in the global financial ecosystem to ensure nobody is left behind by the digitisation of payments. We, for example, partnered with FE Credit, to launch two credit cards in Vietnam that are packed with benefits to meet the needs of the unbanked. A few examples of these unique offerings are the Oi Plus Program – a flagship loyalty program that rewards cardmembers on their everyday spending, and EasyPay – one of Vietnam’s largest 0% retail installment programs, and Selfie PLUS – one-click mobile-to-card image upload solution[3].

Luckily, the ‘how’ in enabling contactless and cashless payments is very simple. When picking a card reader, ensure you choose one created by a company which enables multiple cards, as this will enable your business to accept a wide spectrum of payments – and means no sale is lost because of an issue around how to pay. From a JCB acceptance point of view – Lloyds Bank plc, Barclays plc, and Zettle all accept JCB Cards in the UK. Viva Wallet, which supports around 80,000 merchants in Greece, more than 3,000 merchants in Belgium, and more than 6,000 merchants in the United Kingdom and beyond also accepts JCB Card payments[4].

Losing out on customers who do not carry cash is a no-go for SMEs looking to build back business after a difficult year. Enabling card and contactless payments is a surefire way to appeal to customers looking for convenience, removing one big obstacle to purchase for the on-the-go shopper. That is why at JCB, we encourage SMEs to both enable contactless, and accept cash – for the biggest opportunity to enable purchases and to ensure nobody is left behind.

 

[1] WorldPay, The Global Payments Report February 2021 https://worldpay.globalpaymentsreport.com/en/

[2] BBC, ATM withdrawals drop by £37bn during year of Covid 17 March 2021 https://www.bbc.co.uk/news/business-56413993

[3] FE Credit to Issue JCB Card in Vietnam, 19 November 2020, https://www.global.jcb/en/press/2020/202011180001_alliance.html

[4] JCB and Viva Wallet’s Expanded Collaboration Across Europe, 25 August 2020, https://www.global.jcb/en/press/2020/202008240001_alliance.html

 

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