Local accountants Randall and Payne have launched a dedicated tax service, Randall & Payne Tax LLP with new partner, Chris Mattos, taking the helm as their tax expert. Managing Partner, Michael Anthony said: “As a firm we have been advising our clients about tax for over 130 years. We are delighted to welcome Chris to strengthen our team to focus on specialist tax planning for owner managed businesses”

Chris, who has a broad range of tax experience covering the main stream taxes and those with lower profiles, including Limited Liability Partnerships (LLPs), Research & Development, Stamp Duty Land Tax and Environmental Taxes, explains: “With future cash flow still a major focus of local businesses, now is an opportune time to review your profits. As the year end for the majority of businesses falls on 31 March, year end tax planning is relevant now. If your business year end falls on a different month, the tips below are equally applicable.

The first thing to consider is whether any losses have been made. It is important that these are utilised to give the maximum tax relief – this is something that should be carried out before you get to the end of the year, as without this review it is possible to miss out on other opportunities.

Timing is often the key to tax planning. By making, or committing to, certain expenditure before the year end it is possible to reduce the business tax bill in the future. It is the commitment side that is often overlooked, although it is important that the necessary paperwork is prepared. Such expenditure could include bonuses, pension contributions, charitable donations and capital expenditure.

Capital expenditure has seen the biggest change in recent years. In the year to 31 March 2011 most businesses will qualify for full relief on their capital expenditure as long as no more than £100,000 has been spent. A business should carefully plan its future capital expenditure as from April 2012 the level at which full allowances are given is reduced to £25,000.

In terms of Environmental Taxes, investing in low emission cars remains an attractive tax incentive for owner managed businesses. Such cars quality for 100% capital allowances and can be provided to staff members at a minimal tax rate.

Another option for self employed businesses is that now could be the right time to incorporate their business. Companies are good vehicles that allow for investment more readily than the self employed model. This is because company profits are taxed at a rate of 20% (where associated profits are less than £300k) compared to a maximum of 50% for profits over £150,000. It may also be a good idea to spread the risk of an individual’s business by having separate entities.

Another point that many companies still overlook is to bring family members into the ownership of the family company. This makes sense given that the events of the business day form the basis of supper time conversation. It is not unusual for the casting vote for key decisions to be made at that time – in practice it is often the whole family that is involved. This can utilise the allowances and tax bands of a spouse – just in the way that Parliament intended when independent taxation was introduced in 1990.”

If you would like to discuss any tax related issues, please call Chris Mattos on 01453 763471.