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you looking to pay less incorporation tax fantastic you're in the right place in today's video I'm going to give you five proven ways to pay less incorporation tax that you can start implementing today in order to pay less in [Music] taxes so the first one is basically make sure that you're putting a salary through so every person in the UK has a personal allowance so that's 12,5 £70 you can receive taxfree without paying an income tax so you'll have this your wife will have this potentially your children who as long as you're paying somebody um from your company and they're doing some kind of work for that as long as it's market value you can't have your 15-year-old son getting paid 50k unless they've got some specialist skills that we could argue to hmrc if there social media Mastermind coding website design then we probably could put that through but if that's not the case all of the salaries have to be in reward for Services performed to the company um but most people £ 12,570 that's pretty easy to justify so make sure that you're paying yourself a salary your wife's taking a salary um you know does your does your mom help kind of clean the office and help with some admin here and there okay fantastic well if she's got her personal allowance free that's great it's tax free for her or it's still a massive benefit if someone's got their basic rate tax Band available especially with corporation tax now being at 25% actually because of the salary being a tax deductor but expense in the company that means you're saving tax to 25% and actually if somebody gets a salary in their basic rate band where they pay tax at 20% you're actually saving tax in the company at 5% effectively 25% tax saving less 20% salary um income tax on salary you're saving that 5% tax and you've got the money extracted from the business that's the main thing there it's extracted it's in your pocket or in your parents or your wife's pocket to do whatever they want with and that's the main thing you've taken out of the company where You' usually be thinking about ah income tax dividends and whatnot you've saved the tax and you've got it in your own pocket and that's fantastic that's what you need to be looking at doing is how can we get it from the company into my pocket and then if you wanted to you can loan it back to the company's a director's loed account to take tax free at a later date so it really is a win-win there so make sure you're maximizing every single salary that you can be paying from the company the second is make sure that you're putting your motor expenses through the company so whether your just got a normal car and it's not a company car and you basically just want to be reclaiming mileage absolutely make sure you're doing this it's so easy to forget about this so easy to not track your miles properly But ultimately you still get 45 P per mile that you travel for business purposes so all the property viewings you do visiting clients visiting your accountant uh going to a networking event you need to make sure you record all of this because that 45 PM r that adds up 10,000 miles a year that's £45,000 as a tax deduction as an expense in the company and that your company can then also repay you taxfree so it's a win-win there and if you aren't doing that and if you are looking at company cars that's that's the best result end of day if you can get a commercial vehicle or an electrical hybrid through the car where you can either lease that or purchase it have the full amount usually come off of your profits and ultimately reduce your tax bill without having to pay a too high benefit in kind charge on the company car for personal use um that's that's one of the best ways of doing it if you can still get an electric vehicle they are very tax efficient for most people if you buy new first year 100% allowances imagine buying a £70,000 Tesla bam straight off of your profits huge tax save in there and then you only pay a 2% benefit in kind for driving that car around personally all the electric can go through all the maintenance all the insurance um and basically it's a massive tax win from your point of view so make sure that you are putting all of your running costs where possible through your limited company The Third One charging yourself rent so ultimately a lot of us work from home these days and there are a couple of different ways that you can actually claim tax relief on working from home so of course you can claim the6 a week flat rate from hmrc you don't need to keep any paperwork or records that's fine that's okay if you don't want to do this or you don't spend too much time working from home but for most people especially you've got a dedicated office and quite frankly you probably spend 50 60 70 hours a week in there working on your business well actually in this case you can you stand Bas about to reclaim a massive amount of tax because what you can then do is look at the running costs of your house the total variable running costs see how you can reasonably apportion that to the area that you use as a home office and then claim that amount so effective what you'd have to do there is you'd have to rent it from your company from you personally to your company um at an amount that equals the expenses just important that you have a contract for this and you record this on your self assessment tax return the end result is you don't pay any tax because the expense equals the income um but then your company gets a tax reduction for this and they can repay it to you taxfree as well so make sure that you're charging your company rent if you're spending a lot of time working from home the fourth way is charge interest on your director's Loan account so when you first set your business up the chances are you loaned money to the company um whether that's to buy Properties or whatever it might be even expenses that you're not taking out so I know even just in this video and all the others I've mentioned here renting your home to your company um putting your mileage through that could easily be £10,000 going to your director's Loan account if you don't actually take that out that's sitting there is a credit balance money that your company owes to you and of course as with all loans you can charge interest on these loans um and basically it's a very tax efficient way to take money out so as of course you get 25% tax relief now corporation tax has gone up um as long as it's in your basic rate band you'll get uh highest you be paying is 20% you've still got your 1,000 uh personal savings allowance it's potentially the 5,000 taxfree savings new rate band as well that's available and basically what this can mean is it's very tax efficient to take interest income from your company so if your company owes you £100,000 which is great news you can charge 10 15% interest on this that's tax stct in the company and goes to you either tax-free or a very very low and efficient tax rate so make sure you're utilizing this fantastic opportunity to pay less tax and then the last one at number five is look to see what assets you can purchase through your company so I'm sure a lot of you you've got iPhones laptops all of this stuff where you might usually purchase this personally because yeah you might do your online shopping or you use your laptop for personal online banking reasons but actually the vast majority of time 95% all of this stuff is for business if you're doing videos fantastic get your camera equipment get the podcast mics that is a business expense because ultimately it's going to help Drive Revenue to your business and you know hmrc if what you're purchasing is going to earn them tax revenue it's only fair that you actually can actually get the write off for the initial equipment expenses in the first place so any anything that you're looking at purchasing so a great example of this would be in our property business you know I wanted a drone I see so many people flying around they look pretty cool um but actually we put this through the property business as an expense because we were using it for property property purposes looking at uh roofs getting surveys getting before and after shots of the different developments um and the projects that we were going on so that's just a kind of creative way to look to see how you can justify things as a tax deductible expense so hope you found this video useful guys that's five ways that you you can start paying less incorporation tax um any of those that you don't know of drop them in the comments be more than happy to see how I can help otherwise please do give this video a big thumbs up and hit that subscribe button see you next time guys