We advise our company clients, as part of our service to them, on ways to reduce corporation tax and maximise available tax reliefs. If you are looking at how to reduce your company’s corporation tax liability, it is very important to have discussions with your accountant/tax adviser at least a couple of months before the company’s year end.
Commercial considerations, of course, will and should take priority. However, if there is a choice on timing, do get advice from your accountant/tax adviser on this, as well as advice on what triggers the date for tax purposes.
Timing will become even more important in the next year, given the increase in corporation tax rates for many companies from April 2023 and the changes in tax relief for capital expenditure (such as equipment and vans) in 2023.
Typical types of expenditure companies consider when looking at ways to reduce corporation tax liabilities and also their timing:
- Employer pension contributions;
- Directors’ remuneration package;
- Capital expenditure; and
- If employee bonuses are planned, the timing of these.