After a year of tax relief schemes and government measures to keep companies afloat, in April 2023 a six per cent increase in corporation tax will come into effect, taking the tax rate from 19% to 25%.
Ahead of the tax increases coming into effect, companies can take measures to prepare themselves and help to offset higher costs, and ensure they remain profitable. With this in mind, Professor Marco Mongiello, Pro-Vice Chancellor at The University of Law Business School, has shared his advice on five ways to save money as a business owner.
Monitor and manage your overheads
There are numerous ways in which you can save money on your overheads. If suitable for your business flexible, shared office spaces tend to be a more cost-effective option, with numerous providers such as Workthere offering high quality spaces.
Choosing more eco-friendly alternatives when it comes to energy will also help reduce costs, and similarly to household bills, using price-comparison sites to ensure you’re getting the best deal is a great way to keep utility costs down.
Keep on top of deadlines
One of the mistakes companies often make is when filing paperwork such as relief claims or expenses. Missing deadlines can be costly for any business and may lead to paying more tax than is necessary. Make sure you have a dedicated team or an accountant who knows exactly when to file all paperwork and hit any deadlines that need to be met.
Although it may sound like an obvious switch, a lot of companies still provide documents such as payslips by post. Taking this digital and providing important employee information through email will save on paper and postage costs as well as time. What’s more, there will be a digital record of all correspondence that can be stored digitally rather than in bulky files.
Work with trusted and familiar suppliers
Building relationships with people in your industry and those which you require services from can be a big money saver. Not only may you find yourself receiving discounts and deals, but you’ll also have the confidence that the services you need will be carried out to the highest standard, which can save you money in the long run.
It’s also always worth speaking to any suppliers you’ve worked with for a long time about any loyalty discounts they may be able to provide, as this can be a great quick win to bring supplier costs down.
Review your supply chain
For businesses with a procurement team in place, it's likely this is already taking place regularly. However, it’s always worth checking in and reviewing your supply chain to see if there are any areas where costs can be brought down, or efficiencies can be made.
For those who don’t have a dedicated procurement team it’s certainly more of a manual process to do this but setting the time aside to manage this process can pay dividends in the long run.
Professor Mongiello said: “While an increase in corporation tax is a big change for businesses to take on, there a various ways in which companies can save money to offset these rising costs. While 2023 may feel like a long way away, planning well in advance will really help to reduce any financial risk that comes with increased costs – which can be said for any event which causes increased costs in your business.
“Companies can always find innovative new ways to cut back, especially in this digital age. Being online has changed the way business function and market themselves, ultimately saving money.”
For more information about ULaw, please visit: https://www.law.ac.uk/study/undergraduate/business/