We’re Xero partners based in Manchester, part of Jack Ross Chartered Accountants (est. 1948). Our accountants and bookkeepers work with your Xero data year-round so that when tax return time arrives, we’ve already done the work.
What tax planning can your accountant help with?
Tax planning covers every area where you have a choice about how much tax you pay. For UK small businesses, the main areas are:
- Corporation tax – The rate is 25% for profits over 250,000, 19% for profits under 50,000, and tapered in between. We plan purchases, pension contributions, and dividend timing to keep your effective rate as low as legally possible.
- VAT – Are you on the right VAT scheme? Flat Rate, Cash Accounting, or standard? The wrong choice can cost thousands. We review your VAT position at least annually.
- Directors’ salary and dividends – The optimal split changes every tax year as NICs and dividend rates shift. We calculate the most tax-efficient combination for your personal and company tax position.
- Capital allowances – The Annual Investment Allowance lets you deduct up to 1 million of qualifying capital expenditure in the year of purchase. Timing matters – buy in March, and you get the deduction this year. Buy in April, and you wait 12 months.
- R&D tax credits – If your business does qualifying research and development work, you can claim back money from HMRC. See our R&D tax credits service.
- Pension contributions – Company pension contributions are a corporation tax deduction and don’t attract NICs. For owner-directors, this is often the most tax-efficient way to extract value from the business.
How Xero helps with tax planning
Xero is accounting software, not tax software. But good tax planning starts with good accounting data. If your books are a mess, your accountant can’t plan anything – they’re too busy fixing errors to spot opportunities.
Here’s what we set up in your Xero account to support tax planning:
- Clean chart of accounts – Expenses coded correctly so we can see exactly where your money goes and which costs are tax-deductible.
- Real-time profit tracking – Xero’s profit and loss report shows your taxable profit as it builds during the year. No waiting until year-end to find out you owe more than expected.
- VAT reporting – Accurate VAT coding means we can review your scheme choice and filing strategy quarterly.
- Automated bank feeds – Bank reconciliation in Xero keeps your records current. Automate the data entry and we can spend our time on advisory work instead.
Xero Tax (available to Xero partner accountants) handles the filing side – corporation tax returns (CT600), statutory accounts, and submission to HMRC. But the planning happens earlier, in the regular bookkeeping and management reporting cycle.
Our tax planning process
- Mid-year review – Around month 6-8 of your financial year, we review your Xero data and forecast your year-end profit. This is when most tax planning decisions need to happen.
- Identify opportunities – We look at your income, expenses, invoices, and planned purchases to find areas where timing or structure can reduce your tax bill.
- Recommend actions – Salary vs dividend split, pension contributions, capital purchases, VAT scheme review. We give you specific numbers and deadlines.
- Implement – We make the changes in Xero, file any claims with HMRC, and update your tax return when the time comes.
- Year-end filing – Corporation tax return and statutory accounts prepared from your Xero data and filed with HMRC and Companies House.
Who needs tax planning?
If your business turns over more than 100,000 or your corporation tax bill is above 10,000, you almost certainly benefit from tax planning. Below that, the scope is more limited – but even small businesses should review their VAT scheme and salary/dividend split annually.
Tax planning is most valuable for owner-managed limited companies where the director controls both the company’s spending and their own income extraction. That’s most of our clients.
What does it cost?
Tax planning is included in our annual accounts packages. If you only want advisory work (you have your own bookkeeper and just want tax strategy), we offer standalone sessions from 250 + VAT. We’ll review your Xero UK data, give you a written plan, and implement the recommendations.
Get started
Call us on 0161 832 4451 or book a free consultation. We’ll review your current tax position using your Xero data and tell you where the opportunities are.
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