Tax planning is the minimization of one’s tax liability through the best use of all available allowances, deductions, reliefs, exclusions and exemptions.
Tax planning is usually (and most effectively) undertaken by a professional. Tax planning can be separated into two main areas, corporate and personal.
What is corporate tax planning?
Corporate tax planning is undertaken by organisations seeking to reduce their tax liability. When tax planning for a corporate entity, a competent tax planner will:
- Make use of tax reliefs and opportunities – e.g. capital allowances
- Ensure the best capital vs revenue tax treatment
- Implement tax-efficient accounting policies
- Consider the most tax-efficient structure for your business and restructure if necessary
- Optimise the tax position on major transactions – e.g. property sale or purchase
- Review profit extraction
- Identify succession planning issues
- Maximise the efficient use of any tax losses
Ultimately, smart and effective planning can result in substantial tax savings for a business.
What is personal tax planning?
Personal tax planning is concerned with optimising an individual’s tax position and usually covers the following areas:
As with corporate tax planning, taking advantage of all the tax-saving opportunities available can result in some serious money being saved.
If you would like to ensure that you and/or your business are as tax efficient as possible, please contact us to book a review.