Welcome to the first in our series of blogs on building a tax efficient business.
Welcome to the first in our series of blogs on building a tax efficient business. Our resident tax expert and Chief Operations Officer, Steven, will be sharing tax tips for different areas in each blog.
This first one covers tax tips for company directors.
First, a quick intro to Steven
Earlier this year he stepped up to become a director here at Blu Sky after over 3 years with us!
No two days are the same for Steven. He’s taken on a lot of additional responsibility including managing our growing number of clients, assisting with our ambitious plans to grow and with the development of our new services.
We asked Steven to tell us more about himself and do what he’s an expert at, give business owners some top tips on creating a tax efficient company! After-all, he created our new Tax Insights Diagnostic Service.
Take it away Steven!
The two things I’m passionate about in life are food and business – I’m a big foodie! Outside of work I enjoy travelling with my lovely finance and making the most of everything we experience! She owns her own virtual business which I help with from an advisory perspective.
If I can create a life where I get to do what I love every day and continue to experience all this world has to offer, be it experience-wise or culinary, then I will have lived a good life!
My overall goal is to achieve financial freedom. Which involves being real about the things you want from life, how much money you need, and knowing how you can get there.
I come from an entrepreneurial background, my dad has his own minibus and taxi business, and my brother runs his own business too, so I guess I was destined to run a business!
What’s a tax-efficient business plan?
In a nutshell, a tax efficient plan focuses on what we are doing to build the overall value of the business in a controlled and sustainable way, whilst getting more certainty over what we as shareholders can take tax efficiently to reinvest into our futures.
Steven’s top tax tips for company directors
Here are just a few things company directors are able to do when it comes to saving tax for their business.
I’ve recently set up a personal pension, as part of becoming a director shareholder and I pay a regular amount into this monthly. Pensions can be a very tax-efficient way to put money aside as you pay no income tax or national insurance when the money is paid in. The company also gets a corporation tax deduction on the money they pay in.
Then there is my mobile, laptop, iPad…all of them I’ve put through the business, which all business owners should be doing as this is better tax wise! There is no tax or NIC regardless of whether the phone is used for personal calls, messaging, etc.
Using rewards cards
Outside of work we purchase pretty much everything through Amex. (As I mentioned, we love to travel so we really do enjoy the air miles it gives us!) Many rewards cards and the points generated by rewards cards aren’t taxable.
If you think of all your business subscriptions and the monthly payments you have set up, could you potentially link them to a rewards card to build up points on payments each month?
If an employee has a personal card that they use for business expenses, any points received from the reward card are not taxable on the employee.
Thanks Steven that was really insightful and we can’t wait for you to share the next edition of this blog series!
Steven will be giving more insight into what he’s doing to improve the tax efficiency of the business and for his team. In the meantime, If you’d like to learn more about our Tax Insights Diagnostic service, don’t hesitate to get in touch.