Running a small business can be expensive, with lots of costs to meet on a daily basis. There’s everything you need to operate smoothly, including your staff. And then there are the taxes you need to pay too. Some small businesses can struggle to maximise their profits because they can’t handle the cost of running their company. Luckily, there are lots of ways to save money so your small business can thrive. You can cut back on various expenses and even save on your tax bill. If you aren’t already doing the things in this article, you should start doing them straight away.
Set Up a Limited Company
Many small business owners start off being self-employed. They might work as a freelance and be happy staying independent. But as you begin to earn more, it can make sense to set up a limited company. If you file with Companies House to have a limited company, you could reduce your tax bill. There are lots of calculators out there that will help you work out how much you can save. You’ll be paying corporation tax on your profits. Many limited company owners then pay themselves a tax-free salary up to the personal allowance. You can also pay yourself dividends, which are tax-free.
Claim Capital Allowances
Capital allowances are the expenses that are exempt from your tax bill. You won’t have to pay tax on the money you spend on them. It can sometimes be complicated working out what you can and can’t claim as a capital allowance. If you’re not sure, using capital allowances specialists will help you get it right. You should check the list of capital allowances each tax year to see what has changed. You can claim anything you spend money on for your business, including equipment, machinery and vehicles. Capital allowances can be confusing, so make sure you check with a professional.
Allow Remote Working
One of the biggest costs of running a business is the price of an office or other premises. A lot of small businesses reduce these costs by allowing remote working. If you’re willing to be flexible about working from home, you don’t need a full office. Hot desking and coworking work well for many companies. You could also avoid having to pay business rates, as well as not paying for rent and other expenses.
Avoid Expensive Recruiting
Everyone knows that hiring new people is expensive, but it doesn’t have to be for small businesses. If you want to take on an employee, try doing it through your network and contacts first. Using a recruitment company is what can make hiring so expensive. You might be able to find the perfect candidate if you complete the process yourself. As a small business, you don’t need to find the best person in the industry. You can probably afford to show someone the ropes and help them become a part of your company.
Saving money for your business is easier than you might think. A few adjustments could save you a lot.