Here Are 7 Basic Tax Tips Most Construction Companies Don’t Use
1. Check If You Qualify For Reduced VAT
Not all work in building and construction incurs 20% VAT. You may only have to pay 5% or zero while still being able to claim 20% on your expenses.
2. Make Sure You Are Claiming Employer’s Allowance
If you have even 1 employee you may be eligible for employer’s allowance. This means you can claim up to £5K back in NI a year. You can claim for this year as well as the prior 4 years. This could be £25K in total.
3. Check Your Salary/Dividend Split
We have all heard “Just put £12,570 through payroll and take the rest as dividends” but it’s not that simple. Are you able to sweep up a bit more of your Employer’s Allowance? Can you push some income through a pension? Do you have other income? All of these questions can impact how much salary and how much dividends you should take from the company.
4. Log Your Travel Costs
Make sure you are keeping a mileage logbook and track your running costs, this way you have the option of using the simplified or actual expense method. Feel free to reach out to us about which would be more efficient for your business.
5. Check Your Personal Card
It happens to everyone, you bought something for the business, it could be tools, fuel or anything and you accidentally charged your personal bank card. Always remember to charge that cost back to the business, these add up.
6. Expense Your Safety Gear
Depending on your trade you likely have protective clothing you had to buy. While you can’t expense your general clothing, you can expense protective wear and uniform.
7. Get The CIS Monkey Off Your Back
You will eventually have to pay this tax but you don’t need to pay the 20% upfront. Chat to us or your accountant about applying for Gross Payment Status and paying your tax at year end like every other industry.
If your accountant is not helping you with the above or you just want some additional advice, feel free to give us a call or drop us a message.