Audit and Accountancy

Profit/Tax Planning

The starting point for the calculation of taxable profits is your profit and loss account. In calculating taxable profits, you are entitled to claim deductions from your business income in respect of any expenses incurred for the purposes of trade (with a few minor exceptions). Tax is payable on the whole of the profits of a trade. Year-end tax planning for sole traders, partnerships, and companies should consider:

  • Defer income/advance expenditure
  • Companies may defer sales of chargeable assets until after the year end, thereby deferring capital gains
  • Sole traders and partnerships may consider advancing the sale of chargeable assets if current year capital gains annual exemptions have not been used
  • If your business is seasonal, consider changing your accounting date. The tax rules associated with such a change are complex and great care on the selection of an alternative accounting date is required
  • Accelerate bonuses to staff and directors
  • Make extra employers’ contributions to pension schemes
  • If you are thinking of embarking on a new business venture, bring forward the commencement date to offset any initial losses against current year’s business profits
  • Gains made on the sale of business assets may be rolled over on certain classes of business asset against purchases of replacement assets. Consider whether you need to bring forward the purchase of a replacement asset to enable this relief to be used
  • Remember first year allowances are claimable on most plant and machinery

In business, your profits are your reward for your endeavours. In fact, profitability is the only reliable measurement of a business’s success. Profits are the very lifeblood of a business. They fuel growth, support the owners, provide for the well-being of the staff and ultimately determine the success or failure of the business. You can rely on Pierce's business advisory and tax experts to build your profits and reduce your present and future tax liabilities through timely planning.


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