Running a business means juggling countless priorities, and tax planning often gets pushed to the bottom of the pile. But here’s the thing – while you’re focused on growing your business, you could be missing out on thousands of pounds in legitimate tax savings that are sitting right under your nose.
At Pink Pig Financials, we regularly help our clients uncover these hidden savings. Some are straightforward wins that apply to almost everyone, while others need a bit more strategic thinking. Let’s walk through the key areas where we typically find money that business owners didn’t even know they were entitled to.
The Quick Wins That Add Up
Some tax savings are pretty much guaranteed if you meet the criteria. Take the Employment Allowance, for example. If you’re paying National Insurance on your employees’ wages, you could be claiming up to £10,500 off your annual National Insurance bill. It’s not means-tested, there’s no complex application process – you just need to know it exists, ensure you’re eligible and claim it.
Then there’s the use of home allowance. If you’re working from home (and let’s face it, most of us are these days), you can claim up to £312 per year without needing to keep detailed records of your actual costs. It might not sound like much, but it’s money you’re entitled to that many business owners simply forget to claim.
For directors, trivial benefits can be a nice little earner too. You can provide benefits worth up to £300 per year to each director without any tax implications. Think Christmas gifts, small celebration expenses, or even a monthly coffee allowance. Again, it’s not going to change your life, but it’s a legitimate way to get a bit more value from your business.
The Bigger Picture Savings
This is where things get more interesting, and where the real money often lies. Getting your salary and dividend mix right can save you thousands each year, but the ‘right’ mix depends entirely on your circumstances. Are you building up pension contributions? Do you need to maintain National Insurance credits? Are you planning to buy a house and need to show higher salary income? These all affect what split works best for you.
Salary sacrifice schemes can be brilliant too. Whether it’s pensions, electric cars, or cycle-to-work schemes, you’re essentially swapping salary for benefits and paying less tax and National Insurance in the process. But again, what works depends on your personal situation and goals.
Pension contributions deserve a special mention here. The tax relief can be significant, especially if you’re a higher-rate taxpayer. But it’s not just about the immediate tax saving – it’s about building your future financial security too.
The Strategic Stuff
This is where having someone who understands your business really pays off. Planning when to buy assets, timing income and expenses, making sure you’re claiming all the deductions you’re entitled to – these decisions can have a massive impact on your tax bill.
But here’s the thing about allowable deductions – they’re not always obvious. That training course you did, the subscription to industry publications, even some of your travel costs might be deductible. The key is knowing what to look for and keeping proper records.
A Word of Caution
Now, before you get too excited about all these potential savings, let me share something important. Saving the maximum amount of tax possible isn’t always in your best interest. I know that sounds counterintuitive, but hear me out.
Sometimes the strategies that save you the most tax in the short term can actually take you further away from your longer-term goals. Maybe you need to show higher profits to get a mortgage, or perhaps taking a lower salary now will affect your pension entitlement later. These are the kinds of considerations that matter just as much as the immediate tax saving.
We wrote about this in more detail recently – you can read our thoughts on why tax savings shouldn’t always be your top priority if you want to dive deeper into this idea.
The Bottom Line
The truth is, most business owners are missing out on legitimate tax savings simply because they don’t know what’s available or how to claim it properly. Some of these savings are straightforward, others require more strategic thinking, and all of them need to fit with your broader business and personal goals.
Every business is different, every situation is unique, and what works for one person might not work for another. That’s why we always start with understanding what you’re trying to achieve before we even think about tax planning.
If you’re curious about what savings might be available for your business, or if you want to make sure you’re not leaving money on the table, why not book a discovery call? We can walk through your situation and show you exactly where the opportunities might be. No obligation, no pressure – just a conversation about your business and how we might be able to help you keep more of what you earn.
After all, it’s your money. Shouldn’t you be keeping as much of it as possible?
