A Refrigeration Company with Cash at Year-End
Taking the time to understand our clients needs
Written by Andrew Smith FCCA, Director.
At a pre-year-end meeting, we engaged with a limited company client to review their financial performance and tax obligations. The company was projected to achieve business profits of approximately £200,000, which would result in a tax liability of £40,000.
The director of the company had plans to purchase a new fleet of vehicles in the near future, presenting an opportunity for strategic tax planning.
Tax Savings
Understanding the client’s needs and goals, we suggested making capital purchases of £80,000 before the end of the financial year. This strategic move allowed the company to benefit from capital allowances, effectively reducing their taxable profits.
As a result, the company achieved a tax saving of £16,000. This not only lowered their immediate tax burden but also facilitated the acquisition of essential assets for business operations.
In collaboration with our financial services partner, we further advised the client to make a pension payment of £40,000. Pension contributions are a tax-efficient way to reduce taxable income while securing the financial future of the company’s director.
This recommendation led to an additional tax saving of £8,000, bringing the total tax savings to £24,000. The pension contribution also provided long-term benefits for the director, enhancing their retirement planning.
Alignment with objectives
Through our proactive approach and tailored advice, the client was able to significantly reduce their tax liability from £40,000 to £16,000. The combined strategies of capital purchases and pension contributions not only optimised the company’s tax position but also supported their business growth and financial security.
The director was pleased with the outcome, as it aligned with their business objectives and personal financial goals.
Other Case Studies
Moving a successfully operating with a handwritten bookkeeping system to the digital world
Aiding the smooth sale of a business in the education sector to a Private Investment Company.
A small sole trader nearing retirement, faced significant financial uncertainty
We offer FREE discovery calls to limited companies, sole traders and tax-return prospects.
Once we’ve had a chat, we’ll arrange a proposal meeting to discuss your goals, what services you need, and what our fees will be.