03: Business owners

Business tax planning is usually best done before the end of the accounting period, but even if your business year end is not 31 March or 5 April, this a good time to review your tax position.

Up to £50,000 of trading losses made in your accounting period ending in the 2008/09 tax year can be carried back and set against profits up to three years earlier. You may be able to maximise expenditure this year, or in some cases even change your accounting period end, to take advantage of this temporary extended loss relief.

Much capital expenditure can qualify for tax relief. Businesses now get immediate tax relief on the first £50,000 a year spent on most types of equipment and many fixtures in buildings. It might be worth bringing forward or delaying expenditure to avoid exceeding this limit in any one accounting period.

It might also be worth accelerating other allowable expenditure, such as repairs, so that you benefit from the tax relief earlier.

Consider when to dispose of cars and other equipment. Whether a disposal is before or after your accounting year end will affect your tax payments.

The rate of tax relief available on cars with emissions of over 160g/km is restricted from 6 April 2009, but the allowance ceiling of £3,000 a year  is being removed. You may wish to bring forward the purchase of high emission cars to ensure the existing tax relief applies to those vehicles for five more years.

Useful link: www.businesslink.gov.uk  – helpful advice for businesses.

Planning point: The timing of expenditure and asset disposals before or after the end of your accounting period can affect the amount of tax you pay.Last Updated