For over a century, Horsfield & Smith, chartered accountants and business advisers in Bury, have been helping businesses navigate the complexities of the UK tax system. Whether you need assistance with reducing tax liability, understanding types of tax, or ensuring compliance with HM Revenue & Customs (HMRC), we are here to support your success.
Corporation tax: the current landscape
Effective from 1 April 2023, significant changes were introduced to the UK’s corporation tax system:
- Main rate increase: Corporation tax rose from 19% to 25% for companies with profits over £250,000.
- Small profits rate: A 19% rate now applies to companies with profits of £50,000 or less.
- Marginal relief: Companies with profits between £50,000 and £250,000 pay tax at the main rate, adjusted with marginal relief for a more gradual increase in their tax bill.
These changes have made strategic tax planning even more crucial for businesses.
Your responsibilities
Under HMRC’s self-assessment rules, companies are responsible for calculating their own tax liability and paying their tax bill on time. Missing key deadlines can result in penalties and interest charges. Important dates include:
- Payment due date: Usually nine months and one day after the end of the accounting period.
- Filing deadline: Company tax returns must be submitted to HMRC within 12 months of your year-end.
At Horsfield & Smith, we can manage your tax affairs to ensure full compliance with tax rules and avoid unnecessary costs.
Tax mitigation strategies for businesses
Our goal is to help you reduce your tax liability and take full advantage of available tax-saving opportunities, always working within the spirit of the law. Here are key areas to consider:
- Timing of expenditure
Bringing forward deductible expenses—such as building repairs, marketing campaigns, or other business costs—before your year-end can reduce your current tax bill. Strategic planning can accelerate tax relief and give your business a financial edge. - Capital allowances
- Annual investment allowance (AIA): Claim 100% relief on qualifying plant and machinery investments up to £1 million.
- Full expensing: From April 2023, businesses can claim 100% first-year allowances on new and unused plant and machinery or a 50% allowance on qualifying special rate assets.
- Zero-emission vehicles: Electric vans and cars with zero CO2 emissions also qualify for 100% first-year allowances.
- These options provide a significant tax advantage for businesses reinvesting in assets.
- Bonuses for staff and directors
Bonuses declared before your company’s year-end (and paid within nine months) can be deducted from profits for tax purposes, provided they comply with PAYE and National Insurance. - Pension contributions
Contributions to registered pension schemes offer another way to reduce taxable profits. These payments are deductible in the year they are made, offering immediate tax relief while benefiting employees.
Discover how our tax mitigation service can help you reduce your tax liability while staying compliant with HMRC’s rules.
Corporate finance solutions for capital gains
Corporation tax also applies to capital gains, but businesses can mitigate this impact through careful planning:
- Rollover relief: Postpone tax liabilities by reinvesting proceeds from asset sales into qualifying new assets within the specified timeframe.
- Negligible value claims: If assets become worthless, you can claim a loss to offset against other taxable gains, reducing your overall liability.
- Crystallising losses: Selling underperforming assets can generate capital losses to set against gains elsewhere, helping to reduce your tax bill.
For businesses managing properties, investments, or high-value assets, our team can provide expert advice to help you make the most of these reliefs. If you’re looking for expert guidance on strategic business decisions, our corporate finance solutions service can help you plan effectively for growth, restructuring or acquisitions.
Addressing industry-specific tax concerns
At Horsfield & Smith, we also advise businesses on navigating specific challenges, such as those faced by agency workers or companies using umbrella companies. With increasing scrutiny from HMRC on areas like the IR35 rules and tax avoidance schemes, our experts ensure that your business complies with the latest regulations while avoiding unnecessary exposure.
Why Horsfield & Smith?
We are more than accountants – we are your trusted business advisers. Our expertise spans tax system compliance, corporate finance solutions, and strategic planning to help your business grow. We help clients:
- Reduce tax liability through legitimate planning.
- Manage complex tax affairs, including those in the public sector or other regulated industries.
- Gain peace of mind by staying compliant with all HMRC requirements.
With a tailored, proactive approach, Horsfield & Smith is dedicated to ensuring your business thrives while staying compliant with tax rules and making the most of every tax advantage available.
Contact Horsfield & Smith today
Whether you’re looking to optimise your tax strategy, reduce your tax bill, or plan for long-term growth, Horsfield & Smith is here to help. Contact us today to learn more about how we can support your business with expert advice and innovative solutions.