Maximise Your Corporation Tax Savings: 5 Strategies for UK Business Owners.

With the upcoming increase in the UK’s corporation tax rates, it’s more important than ever to be mindful of your company’s taxable profits. In this blog, we’ll share five strategies that can help you minimise your corporation tax bill and keep more money in your pocket.

1. Increase Salaries to maximise Your Tax Savings

One of the most effective ways to optimise your corporation tax bill is to increase your salary. Salaries and employers’ National Insurance are both tax-deductible costs for your company and will reduce your corporation tax bill. The traditional model of taking a low salary with the rest of your income in dividends may no longer be the best option for you and your business.

2. Make the Most of the Current Financial Year

If you’re expecting a busy year ahead, it’s a smart move to maximise your profits in the current financial year. This way, you can take advantage of the lower corporation tax rate before it goes up.

3. Avoid Slipping into the Marginal Rate of Tax

If your company’s profits are between £50k and £250k you will pay a marginal rate of tax which equates to an effective tax rate of 26.5%.

One of the key ways to optimise your corporation tax bill is to avoid the marginal rate of tax. This rate kicks in when your company’s taxable profits exceed a certain threshold, so it’s important to keep an eye on your company’s finances and make sure you don’t cross the limit.

Moreover, if you have multiple companies, the £50k threshold is divided by the number of companies you own. Now is a good time to consider if you really need all those companies, and if not, start closing some down!

4. Make Pension Contributions to Reduce Your Taxable Profits

Making pension contributions is not only a tax-efficient investment, but it’s also a great way to reduce your company’s taxable profits. By doing so, you’ll be able to lower your corporation tax bill and provide for your employees’ future at the same time.

5. Seek Professional Advice for Tailored Tax Solutions

Finally, it’s always a good idea to seek professional advice from a qualified accountant or tax advisor. They’ll be able to provide you with tailored advice based on your company’s specific circumstances and help you optimise your corporation tax bill.


​​Optimise Your Tax Bill and Secure the Future of Your Business

In conclusion, the recent changes to the UK’s corporation tax rates can be a cause for concern, but there are still ways to optimise your tax bill and keep more money in your pocket. By following these five strategies, you can reduce your taxable profits, avoid the marginal rate of tax, and ensure the future success of your business. If you have any questions or need assistance, don’t hesitate to get in touch with us for tailored advice. Our team of expert accountants and tax advisors is always here to help.