It is said that tax and death are unavoidable; whilst this may be true, there are many ways in which your exposure to tax may be considerably reduced.
There are two key ways in which your tax liability can be reduced:
(1) Tax Planning
Arranging your financial affairs in a tax-efficient manner which is appropriate for your personal circumstances; and
(2) Tax Strategies
Applying more standardised tax reducing structures to your financial affairs.
Tax Planning is accepted in the UK as a legitimate tool to reduce one’s liability to tax; at its most basic, Tax Planning would include deciding whether to extract profits from a company by way of bonus or dividend. As a taxpayer, you are entitled to arrange your financial affairs in the most tax-efficient way possible and there are many ways of ensuring that you obtain the benefit of various tax efficient structures as intended by the Tax Legislation.
Tax Strategies are also accepted in the United Kingdom. Often, Tax Strategies involve the interpretation of Tax Legislation; many people commonly refer to this process as finding ‘Loop holes’. Whilst this is a legitimate process there are inherent risks with interpreting legislation in ways not envisaged by parliament and should a judge decide that the legislation was interpreted incorrectly, you could have to pay your full liability to HMRC which is often accompanied by a fine and in serious cases, you could potentially receive a custodial sentence. The savings involved in Tax Strategies can be substantial; basic schemes to reduce your liability to pay Stamp Duty Land Tax can save you in excess of £8,000.00. Whilst there are inherent risks involved, many people choose to mitigate their tax liability.
At Edward Hands & Lewis we have links with specialist tax advisory tax firms enabling us to provide companies with a comprehensive level of service.
For more information on tax, please visit HMRC at www.hmrc.gov.uk.
Why not drop in and see us? We have offices in Loughborough, Leicester and Market Harborough
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