As per the Companies Act 2006, the United Kingdom legislation classifies a business as a small business if it satisfies two below mentioned conditions:
Government of the United Kingdom has always been encouraging for the start-ups but off-lately it has started to focus on the small-sized businesses, also known and referred as SMEs, mainly because they have become quite a vital part of the UK economy and although there is no specified or concrete definition of small businesses, UK government refers to above mentioned criteria.
Also Read: How To Fund Your Startup
Small Business and Tax Planning
As it is quite clear from the definition that the small business owners are a little seasoned in the business world but are still struggling to find their ground. They are somewhere between the start-ups and medium sized businesses and thus need to be very careful with your methodology of running your business, especially cutting costs wherever applicable and saving money should be on your priority list.
One of the main reasons why you need to be smart with money is because if only you are smart, you will be able to deal with taxes smartly and thus can save a considerable amount of money and that’s one of the major differences between steady profitable businesses to one that’s just barely surviving. However, unfortunately many small business owners end up paying extra taxes just because they are ignorant about certain deductions which they can claim or by dealing with their businesses and retirement savings in an inefficient manner.
Tax Saving Tips for Small Business
In order to manage your operations efficiently and to save on taxes, you as a small business owner can try and inculcate following practices in their business operations to gain maximum tax benefit:
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