Q. Can you provide some tax planning tips before the end of the year?
A. The tax year ends on 31 December so it is worth while considering the ideas below to minimize your tax bill for 2010.
1. Paying VAT and PAYE by direct debit? Many businesses pay their VAT and PAYE by means of direct debit throughout the calendar year with any balance falling due in January. Review the liability now to avoid interest charges arising to ensure that any balance of tax is paid within the strict deadline and limits set out by Revenue.
2. If a company intends making pension contributions on behalf of directors/employees the payment must be made before the end of the accounting period to avail of tax relief.
3. Maximise lower income tax rates: a married couple with both spouses working can earn €72,800 at the standard 20% rate of income tax. In many businesses the second spouse often provides essential support and administration functions. It is tax efficient if that second spouse is remunerated so as to maximise the 20% income tax band. Consider paying salary to all family members who work in the business.
For further information, please contact Imelda Prendergast, Partner, OSK Contracting, OSK Small Business Support
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