10 Practical ways to save you, your business and your family money
Careful tax planning and profitability reviews are some of the key ways in which you can save money. Please read my top tips to help you save some cash before the end of the next tax year.
- Are you a sole trader but think you are heading for profits over £30k? By incorporating sooner rather than later you may be able to avoid hefty payments on account and maximise your cashflow, as well as saving tax. You should always seek professional advice before incorporating.
- Are you already a limited company director? Do you know the most tax efficient way of getting money out of your business? A mix of salary and dividends can be very tax efficient and save you money. Ask your accountant for details.
- Are you registered for VAT? If most of your customers are VAT registered this could be a good way to reclaim VAT on your purchases and save you money. If you are already VAT registered consider moving to the flat rate VAT scheme if you are making vatable supplies and are eligible. In many instances this can actually make you money because the VAT you pay HMRC can be less than the VAT you actually charge.
- Don’t miss your tax deadlines. Missing deadlines may lead to fines, penalties and interest which can be very costly.
- Review your profitability. Look at your cost base as well as your charges. Don’t just stick with the same suppliers you’ve always had. Make a point of reviewing their costs on a monthly basis to compare who is offering the best deals. Bulk buy. For items you use regularly in your business, assess the cost savings of making less regular larger purchases. On the income side, don’t undersell yourself.
- Review your business bank account charges. Do you pay monthly bank charges? Do you need to? Type “free business bank accounts” into Google and see whether it might be worth changing accounts to save money on bank fees.
- Maximise your cashflow. Try to get as many customers to pay you in advance of any goods or services as you can. If you send them an invoice after the work has been completed, consider the credit period you offer and see whether you can reduce it. Delay payment to suppliers as long as you can, either through negotiation of special terms or using a company credit card to pay for purchases (but watch out for charges). By ensuring you always have funds in the bank, you will save money by avoiding overdraft charges, or other costs of finance, and perhaps even make some interest on a balance in credit.
- Outsource. Although this may give you additional charges, it may free you up to spend more time making money for your business, putting you into a net income position. Outsource areas of the business that you don’t enjoy and that can be done more efficiently by someone else, such as admin or accounts, so that you can make more money for your business.
- If your household income is around £40k, make a pre-emptive claim for child tax credits if you are not already in the tax credits system. Even if you think you may not be eligible, by getting the paperwork sorted out, any claim that you subsequently are able to make will be backdated for you by 3 months.
- If you are a low earner, check if you qualify for small earnings exemption which means you do not have to pay Class 2 NICs. The limit for 2011/12 is £5,315. Only consider this if you have children under the age of 12 and still be aware you will be giving up the right to certain state benefits.
Do you have any money saving tips for Mums in Business? Please leave your comments on my blog.
If you would like any advice in this area or any other areas of accounting or tax, please contact me on 01767 260282or [email protected],
Amy Taylor Accountancy takes every care in preparing material to ensure that the content is accurate and up to date. However no responsibility for loss to any person acting or refraining from acting as a result of this material can be accepted by Amy Taylor Accountancy You should always ask your accountant to give you specific advice which is tailored to your personal and business circumstances and properly implemented.
Original Post November 13th, 2010 by Amy Taylor
