HMRC (Her Majesty’s Revenue & Customs) now scrutinise the tax affairs of businesses closer than ever before. The tax planning advice you need will depend on your particular circumstances and how complicated your financial affairs are. Effective tax planning is therefore one of the key challenges for businesses seeking to minimise their expenditure. To ensure the correct decisions are made, businesses must be fully informed to allow the most appropriate decisions to determine their corporate tax risk strategy and the policies they adopt.
If there are substantial sums of money involved and complex tax issues, you may want to take specialist tax planning advice.
Getting it wrong will have significant consequences for your business and as such, the early identification of a suitable tax risk strategy will help ensure that compliance obligations are met and that tax planning is both effective and appropriate.
Using Tax Planning Advice Effectively
An initial tax planning advice session will allow you and your advisers to assess the scale of the opportunity. Some of the potential issues which will be investigated include:
- Identifying your business’ total tax contribution
- Identifying the most suitable way to manage your exposure to tax risk and determining the most effective tax risk strategy and policy
- Identifying all possible tax risks or risk review a particular aspect of your tax affairs
To produce the best possible results, you should aim to establish a continuing relationship which will offer on-going advice. Whilst there may be occasions when one-off specialist tax planning advice is required , for example, in connection with corporate finance transactions or selling a business but even then you will want to plan well in advance. Effective tax planning needs to look at your overall tax position and the long-term consequences, so the way your tax planning advice is organised should reflect this.
The Support Available
Basic tax planning advice should be viewed as a routine part of the general accountancy process for any business, for example, if you use an accountant to handle your corporation tax or income tax self-assessment and VAT returns, it is important to identify what expertise your accountants have and what sort of tax planning they are providing as part of these services.
Our experiences of working with HMRC and companies of all sizes will help our clients to formulate the most appropriate tax risk policy whilst devising and outlining the most effective corporate tax strategy for the future.
The development of a long term tax planning strategy will help to:
- Develop an ongoing corporate tax risk policy
- Complete a thorough evaluation of your current tax risk position
- Identify all existing and potential risks
- Plan strategies designed to help you manage your tax risk
- Risk review specific areas of tax such as entertainment costs, PAYE benefits or VAT in order to provide you with increased certainty
- Identify your total tax contribution
Tax planning advice on other personal tax issues such as tax-efficient savings or inheritance tax planning, may also prove to be useful. Alternatively, you might wish to obtain tax planning advice in these areas from a suitably qualified independent financial adviser. Again, you will need to confirm what expertise they have to know whether they can provide the right tax planning advice.