6 Tax Planning Strategies Business Owners Need to Know

Starting up a small business comes with both exciting opportunities and complex financial challenges.

Smart and proactive tax planning strategies can give small business owners a competitive edge, and when done right, they can unlock savings, reduce stress, and fuel sustainable growth.

At Haggards Crowther, we help founders and small business owners take the guesswork out of tax. If you’re keen to learn more, our guide will equip you with actionable, expert-backed strategic tax planning insights.

What Taxes Do Business Owners Have to Pay?

Knowing your tax obligations as a business owner is essential to avoid penalties and optimise your financial performance. While your specific liabilities will vary depending on your business model and structure, here are the key taxes most businesses need to consider:

• Corporation Tax: Paid annually on your company’s profits if you’re operating as a limited company.
• Income Tax: If you’re self-employed or operating as a sole trader, you’ll pay Income Tax on your profits.
• VAT (Value Added Tax): If your taxable turnover exceeds the VAT threshold (currently £90,000 as of 2024/25), you must register and submit returns.
• National Insurance Contributions (NICs): Payable by employers, employees, and the self-employed, depending on your setup.
• Dividend Tax: If you’re a director/shareholder of a limited company and take dividends, you may be liable for additional tax depending on your income.
• Capital Gains Tax: Applies when you sell or dispose of business assets like property, shares, or equipment and make a profit.
• Business Rates: A local tax on business properties such as offices, warehouses, or retail units.
• Payroll Taxes: Including PAYE and NICs for employees, which require careful management and reporting.

With the rise of multi-channel platforms, cross-border sales, and digital services, keeping on top of these taxes can be complicated. But with the right support, it becomes a powerful part of your growth strategy.

Without a clear plan, you may be missing out on legitimate deductions, overpaying tax, or risking non-compliance.

1. Choose the Right Company Structure

The foundation of any solid business tax planning strategy is the right company structure. Are you a sole trader or a limited company? This decision will impact everything from liability to tax efficiency.

For many digital entrepreneurs, setting up as a limited company offers the best balance of credibility, tax savings, and growth potential.

Not sure where to begin? Our guide on how to start your own business walks you through the essentials, or explore our start-up support services for hands-on help.

2. Register for VAT Early (If It Makes Sense)

VAT can be a minefield for startups and small businesses, especially if you’re dealing with multiple revenue streams, clients across the UK and internationally, or working through platforms.

Strategic VAT registration not only ensures compliance but can also enhance your brand’s professionalism and allow you to reclaim input VAT.

Get up to speed with our VAT Guide, or consult our VAT management services.

3. Payroll and Director Remuneration

If you’re paying yourself or employees, getting your payroll right is crucial. Effective planning around salary vs dividends can reduce your tax burden significantly.

Check out how to handle payroll taxes for your business and discover our full payroll management services to dive deeper into this.

4. Take Advantage of Allowable Expenses

Business costs like software subscriptions, marketing spend, domain hosting, and professional services all have the potential to be deducted.

With careful strategic tax planning, you can reduce your corporation tax bill by making sure nothing is missed. A well-maintained bookkeeping system is your best friend here.

We provide extensive bookkeeping support tailored to busy founders and growing small businesses.

5. Plan for Growth with Tax in Mind

Are you looking to scale your business? Whether you’re hiring your first employee, entering new markets, or reinvesting profits, every step should be backed by intelligent tax planning.

That means forecasting corporation tax liabilities, preparing for VAT thresholds, and planning your cash flow to stay ahead of HMRC deadlines.

6. Stay Updated and Informed

Tax rules can change quickly. To stay on the right side of HMRC and make the most of any savings, business owners need to keep up with the latest updates and plan ahead.

Partnering with an expert like Haggards Crowther means you’ll never be caught off guard. We offer customised and consistent support to small businesses and startups who want clarity, order, and financial confidence.

Choose Haggards Crowther for Expert Tax Planning

Don’t let taxes become a stressor. Let it become your strength.

With decades of experience supporting small businesses, startups and ambitious founders, we understand the unique pressures and opportunities of the business world. Our team delivers:

• Bespoke tax planning strategies aligned with your goals
• Full-service support from company formation to payroll management
• Reliable and responsive communication
• Clear and helpful guidance with no jargon

Ready to take the next step? Contact our experienced team today to schedule a no-obligation consultation.

Stay savvy, stay compliant, and let Haggards Crowther handle the rest.

Terry Smith

Terry started life at HM Revenue and Customs before moving to Ashdens and then on to BDO and Chantrey Vellacott, the combination of which has provided Terry with a wide breadth of experience which has proved invaluable when helping a broad range of clients with their tax affairs.

Whether it involves meticulously organising a client’s tax affairs or leveraging his expertise to mitigate their tax exposure, Terry has a passion for delivering tangible results.