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Tax Savings
Whether you have just started your business or have been in business for a long time, Linx Accounting can help you with your tax planning needs.
If you are looking to make tax savings but do not want to attempt to interpret detailed tax legislation, we would recommend seeking the advice of a professional. We offer all clients tax planning reviews and try to ensure they only pay as much tax as they are legally obliged to and no more!
Whatever your tax planning needs are, we will endeavour to find a tax saving scheme to suit your circumstances so make sure you contact us, especially as there may be more specific tax planning tips and tax advice available for your business sector.
We have included a series of tax tips below which provide general guidance on various tax saving strategies and should answer some of your tax questio
Employing your spouse in the business
If you are self-employed and your spouse helps out with general administration, or any other role, it is quite legitimate to pay your spouse a salary.
However, there are a few rules that need to be followed, such as how much to pay your spouse and to keep evidence that the payments were made during the year.
Sole traders with higher rate tax liabilities will benefit significantly from this arrangement if their spouse is a non taxpayer or lower rate taxpayer, and further tax savings could be made by making pension contributions.
Low interest loans provided by employers
Employers can provide certain interest-free or low-interest loans without a taxable benefit, provided HMRC conditions are met. Where the total balance of relevant loans does not exceed £10,000 during the tax year, the small-loan exemption may apply.
One potential use is helping an employee purchase a personally owned vehicle. As the employee owns the vehicle personally, it is not treated as a company car benefit. The loan must still meet the relevant conditions and be properly documented.
Stock valuation
When it comes to preparing your year-end accounts, one area that is often overlooked — yet can have a meaningful impact on your tax position — is the valuation of closing stock. Understanding the rules around stock valuation, and applying them correctly, can present a genuine and fully compliant opportunity to reduce your taxable profits.
Under standard accounting principles, stock should be valued at cost. This means the total expenditure incurred in bringing the stock to its current location and condition — including purchase price, import duties, freight costs, and any directly attributable costs of conversion. For most businesses, this is straightforward: you value your unsold stock at whatever you paid for it, and that figure feeds into your profit and loss account at the year end.
However, accounting rules and HMRC guidance both recognise that valuing stock at cost is not always appropriate — particularly where the market value of that stock has fallen below what was originally paid for it.
Recover VAT
One of the most commonly overlooked opportunities for newly VAT-registered businesses is the ability to reclaim VAT on certain purchases and expenses that were incurred before the date of VAT registration. Many business owners assume that once they have registered for VAT, they can only reclaim input tax on invoices received after that registration date — but this is not the case, and failing to take advantage of this provision can mean leaving a significant amount of money on the table unnecessarily.
When you first register for VAT with HMRC, you are permitted to recover input VAT on eligible purchases made prior to your registration date, provided that those goods or services were used for the purpose of your business. The mechanism for doing this is straightforward — you simply include the relevant input VAT figures on your very first VAT return, in the same way you would treat any other reclaimable input tax. There is no need to file a separate claim or submit a special form; the adjustment is made directly within the return itself, making the process relatively simple from an administrative perspective.
Tax Relief on Household Costs
For many self-employed individuals, sole traders, and company directors who work from home, the idea of claiming tax relief on a room used exclusively or partially as a home office is an attractive and entirely legitimate way to reduce your tax liability. Employees who meet HMRC’s conditions may be able to claim tax relief for certain additional household costs incurred when working from home. The rules changed from 6 April 2026, so eligibility should be checked for the relevant tax year.
Capital Gains Tax - Selling Property
If you have Capital Gains Tax (CGT) to pay, for example because you’ve sold a holiday home or rental property, you will need to complete a tax return. If you sell a UK residential property, you generally need to report and pay any Capital Gains Tax due within 60 days of completion. For disposals completed between 6 April 2020 and 26 October 2021, the deadline was 30 days.
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