Moreover, we begin by visualizing the staggering amount collected by the government in taxes every minute. This serves as a reminder of the significant financial contribution businesses and individuals make to the system.

Importance of Tax Planning

Managing your tax effectively is crucial for financial stability and growth. We delve into why tax planning is not just about minimizing tax liability but also about responsible financial management.

Assessing Your Current Situation

Before we can provide any meaningful advice, it's imperative to understand your current financial standing. This involves analyzing both personal and business objectives, ensuring a holistic approach to tax planning.

Integrating Business and Personal Objectives

We emphasize the importance of aligning your business and personal financial goals. Whether you're a small business owner or part of a larger corporation, integrating these objectives is key to effective tax planning.

Differentiating Tax Evasion and Tax Avoidance

It's essential to understand the distinction between illegal tax evasion and legitimate tax avoidance. Moreover, we discuss the ethical and legal considerations of minimizing tax exposure.

Compliance and Regulation

Compliance with tax regulations is non-negotiable. We highlight the importance of fulfilling tax obligations while cautioning against unreliable sources of information.

Practical Tips for Tax Reduction

We provide actionable advice for reducing tax bills while considering the broader financial picture. From exploring tax reliefs to strategic business structuring, we offer insights to help you minimize tax liabilities.

Approach to Tax Planning Review

Our approach to tax planning review involves thorough analysis and strategic recommendations. Additionally, we outline the steps involved, emphasizing the importance of estimating potential tax savings and developing an actionable plan.

Conclusion: Planning Your Future with Impact

Effective tax planning is not just about minimizing tax burdens—it's about planning your future with impact. By taking proactive steps to manage your tax effectively, you can achieve greater financial stability and growth.

By adhering to these guidelines, we ensure that your tax planning efforts are strategic, ethical, and ultimately beneficial for your financial well-being.

Visualise stacking five pound notes on top of each other until they reach the height of a 50-story building. That is equivalent to about 1.9 million pounds. And that's the amount that's collected every single minute of every single day by the government for taxes. Now those taxes are made up of a variety of taxes, from capital taxes to income taxes.

And did you know of those taxes, the four big ones VAT, income tax, national insurance, and corporation tax, the taxes that impact on many small businesses, many large businesses, not-for-profit organisations constitutes account for about 1 million pounds a minute of that figure. Now this week's podcast is not just talking about big numbers, but it's talking about that wonderful topic of tax, but more particularly how we approach tax planning.

I'll give you a guide and overview of what you should expect in a tax planning review, whether it's from your own accountant, your own tax advisor, or you seek it somewhere else, and why it's so important, why it's so crucial that business owners, private business owners or not-for-profit business owners should consider tax planning as part of their business financial planning.

Let's crack on with the podcast.

You're listening to the I Hate Numbers podcast with Mahmood Reza. The I Hate Numbers podcast mission is to help your business survive and thrive. By you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now here's your host Mahmood Reza.

Now step number one in any planning process whether it's tax, or it's your general finances is to understand where you are at the moment. What is your current situation? It's next to impossible to give any advice to consider any way forward in your situation unless you understand where you stand financially.

Think of that analogy about planning your course on a map. Before you embark on a journey, you've got to know what your destination point is. Otherwise, therein lays disaster, risk taking and calamity. You may enjoy that particular sort of journey, but I wouldn't recommend it in the context of your finances.

And I certainly wouldn't recommend it in terms of tax planning. So take stock of your finances, what your business and your personal objectives are, your aspirations and where you wish to end up. Many small business owners will have a company through which they trade, but they'll also have their own personal situation here.

And for me, when you're looking at tax planning, you've got to combine those two. It's very unlikely there's going to be a one-size-fits-all situations. What works for one taxpayer, one group of taxpayers, is not necessarily going to be the right advice, the right approach for somebody else. You could be at various stages in your business life,

you could be a starter, you could be looking to expand. You could be looking to retire at some point and perhaps sell your business. You may be seeking new adventures, new chapters in your life, and you want to know what's the most efficient way to prepare your business for that sale. What's the most effective way to minimise that tax obligation, that tax burden.

I mentioned earlier on, about considering where you are. Many business owners will be at various stages in their business cycle. So understanding where you are and where you want to get to is going to be a vital piece of input into that overall advice that you give. Advice is given at the end in terms of a tax planning approach and unless you understand

what's going on around you, what's likely to come up in the future, it's going to be very difficult to understand what you should do, what actions you should take. The second thing I want to emphasise is why I think it's so important. Now, tax to me is a cost. Nobody is here talking about how we illegally avoid tax.

That's tax evasion. That's a definite no-no from me. And tax evasion is what's likely not only to end up with financial penalties and consequences. In a worst case scenario, you could end up eating prison food and that's probably not gonna be good for your digestion, let alone your future career. So tax evasion, where you deliberately understate your income, overstate your expenses, you hide income, whether it's offshore,

you do really weird and wonderful things here with the deliberate intention of not paying tax, then that is something that is not to be recommended. It is actually a criminal offence as well. We're talking about tax avoidance. We're talking about planning your affairs such that you mitigate your tax exposure, your tax liability.

And in my opinion, that's an obligation as a responsibility of all business owners, not only to themselves, but their workers and their suppliers. So actually make sure you make an efficient use of what's available to you to actually minimise and reduce your tax exposure. One thing to be really important of here is be conscious of regulation.

It's absolutely crucial to stay compliant with HMRC, Her Majesty's Revenue and Customs, or I should say His Majesty's Revenue and Customs, so obviously that normal compliance thing, the bread and butter of your tax obligations, getting your tax returns on time, your VAT returns on time, fulfilling your obligations is an absolute must.

And that's probably where most people come across the area of taxes when they come to file their personal or their corporate tax returns. Another fact I want to flag up is be careful who you speak to. Now the great thing about the internet is there's loads of information on the internet. The bad thing about the internet is there's lots of information on the internet.

Be very careful, not all the information you see out there is curated. Not all that information comes from a reliable source. And I would sometimes question, by the way, the advice that comes from HMRC, you’ve got to love them, what they publish, the advice that you might get on a general helpline. So be very cautious about the advice you receive.

If you are receiving advice in a tax arena, make sure the individual or the organisation you're speaking to has got experience, it seems to be qualified, has the requisite level of insurance, has experience and knows what they're talking about. I would certainly recommend talk to two or three individuals or companies before you’ve made that final decision. Your current accountant may be in the best position to advise going forward and a competent professional accountant tax advisor, if it's outside of their comfort zone, will know somebody within their network to recommend.

Now, just a few tips to share with you folks here just to add some value to this podcast some practical tips to consider about reducing your tax bill. Again, my personal view is you can give odds and sods here bits of advice about what to do here. But when you do any form of forward planning when, you're factoring about the tax exposure that you have as an individual and a company, look at them combined.

You need to look at the big picture and not just isolated bits of advice because, again if I take for example a business startup, the default position for many business owners is to form a company. Now that's not always the best advice. For example, if you're starting off your business and you're likely to have losses and you've got income that you've had previously where you've paid tax, operating as a sole trader potentially has advantages over a limited company.

We can always change the structure later on. Sometimes it makes sense to start off as a company to give you that flexibility to give you that access to greater tax planning opportunities. So there is one particular area that you need to actually have a good conscious thought about. There are many tax reliefs and incentives out there; it's been estimated there are about 1 000 tax reliefs in structural or otherwise, advantages for private companies, for arts organisations, for creatives, for charities. And those tax reliefs, structural or otherwise, impact on the variety of taxes we get exposed to.

VAT, income tax, corporate tax, capital gains tax as well - all of those things, you know, there are reliefs and incentives out there. And these reliefs, by the way, are not just applicable for the large corporate organisations, it's not just available for those people who've got access to expensive accountants and lawyers, etc.

Obviously, you need to be able to navigate the jungle, navigate the myriad of reliefs out there, but they're all available. Just to throw it into the mix, most business owners are conscious of R&D relief, research and development. It's not just for people in white coats and laboratories, it has a wide application.

In the creative sector, the arts and social sector, there are many creative tax reliefs. For example, theatre tax relief, orchestra tax relief, film tax relief. Those are three samples there. Now, as I said earlier, tax planning isn't about, you know, that mystical arena of off-shore accounting, off-shore tax havens

it's not about bending the rules until they snap. It's about managing your finances smartly and responsibly. Now lastly, folks, I want to just give an outline of what you should expect in a typical, tax reviewer, maybe the word typical is not the right word to use in this situation, this is how we would approach it in our firm and again just take that as a benchmark see what happens. And I said step one you've got to understand you've got to do a full analysis of the situation, that initial data gathering of where you stand personally, what's your circumstances, family or otherwise what's your future aspirations?

What's coming up on the horizon now in the next two or three years and beyond? That once you've got that initial evaluation, that diagnostic so to speak, just like taking your car into the garage the mechanic would not be able to say this is what we're going to do, there's a problem. You've got to be able to diagnose and analyse the situation accordingly.

And tax is a pretty complex situation, lots of subject to interpretation. As such, having done an initial data trawl, initial analysis and evaluation., then comes the report and the recommendations. Suggesting based on risk appetite, based on what aspirations and objectives are where those opportunities arise to mitigate and reduce tax allowances that you can grab, the reliefs that are applicable to your business and maybe yourself. There should be an action plan which outlines the areas of focus, the areas of priority and competent professionals should be able to estimate the savings that you make from tax itself.

You can weigh that up against the cost of that service against what you're likely to save directly, what you like to save in the future and perhaps mitigating any risk that you might face into the future as well. As I'm talking about risk in the future, one thing we know about tax is that pretty much everybody, not just the UK, but around the world will pay tax at some point in their life cycle.

The moment we come into the world, we live our life and we depart this world, tax will be extracted some form or another. And therefore we need to be conscious of that whole life cycle. So summarising, there's the discovery phase, there's a diagnostic phase, and there should be a meeting that follows up thereafter to give you that feedback and evaluation.

So folks, I hope you got something out of this podcast. I'd love it to know, are you in that cycle where you're looking to plan your future, mitigate, manage your taxes? In future episodes, I'm going to give you a reference point to our tax diagnostic and application review that we carry out ourselves. But for now, let that sink in.

Think about your lifestyle, think about your future, and think about having an MOT and diagnostic with your tax and plan your future more effectively. If you like this podcast, which I hope you do, I'd love it if you left a review. Share it with those who might benefit. And until next time folks, don't over worry about tax, relax a little bit more and make sure you take care of it and plan your future with impact.

We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.