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Cost of living crisis: small business saving tips

Cost Of Living Crisis Small Business Saving Tips

Cost of living crisis: small business saving tips

Given the current economic climate, many businesses and individuals across the country continue to be affected by the rise in the cost-of-living and are under pressure as there seems to be consensus that government support isn’t enough. Although some industries may not be affected as others, the majority of SMEs are feeling the bite.

 

What can SMEs do to try and save money?

1. Revise your outgoings

We come across lots of clients and prospects every day who don’t know how much they spend. If you don’t know what you spend and don’t therefore adapt your prices you might be losing money where you shouldn’t. We could advise on looking into keeping your business costs under control and see what potential tax allowances could be done below.

2. Seek professional help

At AIMS we offer a fixed price per month, so you won’t have to worry about a surprise bill or hourly costs. We could look into your business financials to improve your cashflow where possible, and provide business advice and support.

3. Insurance

If you own your premises, and its value has increased but you haven’t declared the updated asset values to insurers, the policyholder may not fully recover in case of a claim. You might also want to check coverage limits, and increase policies where possible.

4. Mortgages

If you have one at the moment, it may be a good time to review your current rates, if they are fixed or variable, and look into a potential re-mortgage as it can save you and your business money in the long run. A re-mortgage could also lower your monthly payments, depending on the type of financial product, as you could lock in a longer-term fixed rate.

 

Tax Allowances for Sole Traders

There is no magic answer to the increasing costs SMEs are facing, but the above might be able to save on the pennies. Also, there are different tax allowances that sole traders can claim, whether they have been trading for many years or just one. Claiming an allowance means that a business can get tax relief on the ‘allowable’ items which commonly include:

Travel and motor running expenses

A claim for fuel, parking, repairs, breakdown cover, insurance and servicing. you can only claim for business matters, and any personal travel between home and work, non-business driving costs, speeding or parking fines will not be counted.

Household expenses

Can be claimed as a sole trader if you work from home and bills are minor. Any rooms in the house used for business purposes should be kept for business purposes during work hours, although allowing family to use the room after work can avoid you being charged Capital Gains Tax when selling your home. Tax deductible expenses can be cleaning costs, heating, repairs, electricity, water, council tax, mortgage interest and rent.

Training courses

Also qualify as an allowable business expense although it must be relevant to your profession or work, and not something related to entering other marketplaces.

Tools and equipment

Are also tax deductible if the sole trader depends on machinery to do their job, and if maintenance or replacements are needed.

Buying or leasing vans and cars

It is also claimable business expenses, and there are three leases available (Hire Purchase, Operating Lease, and Finance Lease).

Uniforms’ tax claims

Only possible to be claimed if they are only able to be used for work and not ‘everyday wardrobe.’ Tradesmen costs for protective clothing, and even entertainers for stage costumes can claim tax allowance.

 

Need Advice?

If you require more technical and detailed help from a qualified business accountant, we’ll be happy to provide further assistance. Contact your local AIMS Accountant today.

 

Blog by AIMS Accountants