How does a Chartered Accountant help you in tax planningby Aarif Habeeb Digital Marketing Strategist and Content writer
The UK tax regime is notoriously complex, and all too often business owners find themselves lost in a maze of constantly evolving legislation.
Tax can be a considerable cost to profitable businesses and individuals.
Tax planning for businesses is imperative as these costs include the tax itself as well as the costs of complying with reporting obligations, dealing with enquiries from the tax authorities and penalties for non-compliance.
A Chartered Accountant (CA) plays a very notable role in your tax planning, by relieving you of the administrative burdens and can advise you on how to minimise your tax liabilities with their tax efficiency advice.
Here we will explore more areas where a CA can help you in tax planning,
A CA can help with all areas of tax planning, including:
· Deciding on a tax-efficient structure
· Making the most of allowances and reliefs
· Reducing tax on disposals
· Maximising tax relief on acquisitions
· Liaising with the authorities on your behalf
· Assisting with compliance requirements, including corporation tax self-assessment
A CA can also help to ensure that your personal wealth is managed as tax-efficiently as possible, offering advice in such areas as:
· Minimising tax liability for personal taxes, including income tax, capital gains tax, inheritance tax and non-domiciliary taxes
· Completion and filing of relevant tax returns
· Advice on which payments are due
· Advice on trusts and estate planning
Capital gains tax
Whether you are selling shares, your property or other assets, a Chartered Accountant can explain how capital gains tax works, calculate the liability and advice you of any reliefs to reduce your tax bill.
Every company registered is required to pay taxes on its profits. A company usually prepares and submits its corporation tax return on annually basis to HMRC.
An accountant will prepare the company tax computation and tax return (CT600), submit these with your accounts to the HMRC and advice you of tax liabilities due.
An accountant will point out any opportunities for savings, from claiming additional reliefs to restructuring your affairs in a more tax-efficient way.
A Chartered Accountant can conduct a review of the company’s position shortly before the accounting date to advise you of tax-saving measures that can be put in place before year-end.
Enquiries into the tax affairs by HM Revenue & Customs can be a very intimidating experience.
The HMRC is entitled to enquire into your tax affairs at random, and as such, they never say why they are investigating.
Their random enquiries are generated by computer so they may investigate without even a suspicion of anything being wrong, but none of this eases the stress.
Your CA can help by acting as an intermediary between you and the HMRC, reviewing their interpretations of your financial transactions as well as their interpretation of tax law.
A Chartered Accountant will handle correspondence with the HMRC, keeping you informed at all stages, and negotiating on your behalf so as to minimise the disruption to you.
Income Tax & National
A Chartered Accountant can prepare your self assessment tax return and calculate liabilities to income tax and national insurance each year.
A CA on board will advise you of the due dates for payment and will point out any opportunities for savings, from claiming additional allowances or credits to restructuring your affairs in a more tax-efficient manner.
A CA will assist in the preparation of VAT returns, advise on the rules and assist with VAT visits and the response to queries.
Your Chartered Accountant will advise on elections such as an option to tax, use of specific schemes and assist with any other VAT matters.
Overall a Chartered Accountant understand the taxation complexities so that,
· Where the law provides an opportunity for tax mitigation, they can advise you on such opportunities
· Where unusual circumstances exist which enable you to access favourable reliefs and outcomes, an accountant can design your tax plans to maximise any benefit.
A CA presents your affairs in an accurate and compliant way and protects you from penalties for non-compliance, which is as essential now as it has ever been.
Effective tax planning requires knowledge, instinct and experience in an arena with inexact parameters.
A Chartered Accountant has these attributes in abundance and is well-placed to minimise the current and future tax burdens of you, legitimately and in accordance with their overall commercial and domestic plans.
In short, if you are starting out in business or running an established business, a CA can help to ensure that all of the initial registration requirements are met and help you to plan for future liabilities by explaining the tax system in the plain language. Thus, it is very beneficial to hire a Chartered Accountant to run your business with ease and lead it towards sustainable growth.
Created on Apr 20th 2021 07:17. Viewed 90 times.