Tax Planning = Less Stress

As a business person, how can improved tax planning help reduce the stress I’m facing?

The mere mention of the word tax can often send business people into a spin. However, dealing with your business’s tax affairs doesn’t need to give you a headache. Putting an extensive tax plan in place for your business will certainly help relieve some of the stress you face from meeting your tax obligations.

The two main reasons for this is that a clear and concise tax plan will ensure that you meet and continue to meet all your tax pay and file obligations as they fall due and at the same time ensure that any unnecessary tax leakage within the business is removed.

Numerous people end up reacting to tax deadlines and liabilities as they fall due rather than treating tax as an element of your business which must be considered throughout the year. The likely tax deadlines your business must meet will typically include VAT, PAYE/PRSI, Corporation tax and personally your own Income Tax Return. The filing dates for these returns remain constant and are known at the beginning of each period. The correct tax plan for your business will allow you to meet these filing deadlines but also ensure that you have the available cash flow to meet any liabilities as they fall due. An example of this might be the undertaking of a VAT review as part of putting the required tax plan in place. This review would ensure the correct VAT rate is being charged on each of your product or service offerings while at the same time ensuring your entitlement to reclaim VAT on purchases is fully realised. With this review completed you can confidently move forward, safe in the knowledge that your VAT obligations are being met.

There is little doubt that an impromptu approach to tax planning can have a negative impact on your business’s cash flow position. The late or incorrect filing of tax returns can lead to interest and penalties being applied by Revenue. Furthermore, a detailed tax plan for your business will ensure there is no unnecessary tax leakage. An example of this might be a salary review for a company director as part of the overall tax planning strategy for the business. A detailed strategic tax and financial review in this area may allow a company director to take the necessary funds to fund their desired lifestyle while at the same time funding a pension for their retirement in a tax efficient manner.  By reducing the tax arising in this area the business will have increased cash flow to meet other obligations as they fall due or to invest in growing the business itself.

What is clear is that a defined tax plan for your business will help remove some of the stress around tax. Tax doesn’t have to be so stressful and with the correct approach it need never keep you awake at night again.

If you feel your business could benefit from such an approach, please contact RDA Accountants Limited’s Tax Manager George Skelton CTA, ACA, MBA at our Wexford office for further assistance