Small and medium-sized businesses must set out clear objectives and formulate a strategy for their future growth to benefit from tax reliefs, according to a leading tax expert.
Speaking at an Institute of Directors conference on successful small businesses, John Newman, tax partner at Smith & Williamson, said the question of managing tax was central to the future of any SME.
‘It is important to recognise that in the longer term you are almost certainly going to sell out once the business is successful,’ Newman said.
‘But tax is really the secondary discussion. The overall strategy should be agreed, then tax management can be discussed once this is set.’
Newman also said SMEs should be looking to minimise tax by considering ‘what is in their back pockets’ rather than the more traditional approach to revenue versus capital.
A small business database has been published by the Small Business Research Trust, in conjunction with the Department of Trade and Industry. It comprises answers to commonly asked questions, such as the effect of taxation, benchmarking and late payment on SMEs.
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