Reducing The Tax You Pay As A Small Business

If you run a small business and employ yourself you will know how much the taxes build up - what with income tax, national insurance you pay and national insurance the company pays on your income, even if you pay yourself small amounts of money you still end up being heavily taxed in the UK (part of the reason so many people live on benefits is they seem to earn more that way from your high taxes than going out and getting a low paid job).

Therefore what can you do to help to reduce your tax?

Well the key is to be as diligent as you can with your accounting and ensure that everything that is a business expense you charge as a business expense and put down as a cost on your books.

For instance when you buy stationery or anything at all, even small purchases such as stamps, make sure you always keep receipts and record these purchases as a business expense as they are being used by the business rather than just paying out your own pocket and not putting against the business.

Learning to separate your own finances from those of the company when you run a small business is critical to ensuring that you don't penalise yourself by not listing genuine business costs as business costs.