Running a small business is tough. There’s a lot you need to spend money on to get started. And when you do generate a profit, this is often reinvested back into the growth of the business. So when it comes to putting aside large portions of your revenue for taxes, this can be a major burden for SMEs.
The tax burden is a serious issue for small businesses, and it can significantly impact their ability to grow. However, there are a few ways businesses can help to ease this burden – one of them is with training. This quick guide explores how training can help take the tax pressure off of SMEs.
Understanding the Tax Burden On SMEs
Smaller and new businesses often pay tax on a much larger portion of their profits compared to big, more established businesses. This insight comes from a report run by Sage, covering over 3000 companies across 11 different countries.
This seems unfair, as small businesses typically sacrifice earning a profit to invest in the business’s growth. And with the tax bill facing small businesses often higher than the corporate tax rate, this can harm business growth.
How Training Can Help Ease the Tax Burden
Making your small business more tax-efficient is something all entrepreneurs should focus on. One of the best ways to do this is to understand what business expenses are tax deductible.
Training is one of these expenses, as long as the training is related to your business activities and production of income. This means you can deduct this as a valid business expense, reducing your tax burden.
This is important to know, as investing in training will also help your business become better at what it does. Offering training as a benefit to staff is a great way to improve their skills and improve staff retention while generating an expense you can write off your tax bill.
Work With a Tax Practitioner
If you’re looking for the best ways to make your small business more tax efficient, then working with an experienced tax practitioner is generally the best approach. Tax professionals can help you identify deductible expenses, and help set up your business in a way that makes it more tax efficient, and more profitable. This can make a major financial difference to your business over the long run.
From your cellphone network to your work vehicle, there are many deductible business expenses you can make use of to ease your tax bill. One of these is training.
Investing in training will help you develop a stronger workforce while providing a legitimate tax write-off. Just make sure you maintain your training invoices. Luckily, there are many different online and in-person training options available, covering all kinds of different business skills.
Of course, working with a tax practitioner will help your business become a lot more tax savvy, helping to ease the tax burden for SMEs. There are many advantages to working with an experienced tax professional, even if you think your business is tax efficient.
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