Start-up businesses must prioritise good management of costs. They must seek to maximise revenues so that they have enough reserves to keep them going when things get tough. You should start by focusing on your tax liability by taking advantage of all the tax incentives that tax authorities give you. Allowable business expenses are the best place to start if you want to manage your tax expenses. Ideally, tax authorities permit the deduction of allowable expenses before arriving at your taxable profits. Many start-up businesses often don't know the components of such allowable expenses. Here is a discussion that will help you:
Office Costs
The physical location of your business is a good place to start when you identifying your allowable expenses. Office costs include the rent paid periodically to enable your business to run its operations and processes. Secondly, you need to add costs associated with making the office habitable and conducive for your business activities. These include lighting, heating and any land rates paid to relevant land authorities.
Travel Costs
Some business undertakings require mobility for you and your staff. For instance, if you run a consultancy firm tasked with managing rental properties, you need to move from one place to another during periodic site visits. Take note of all the expenses you incur in the course of discharging your services because you need them to claim them from your gross income. Parking fees, fuel costs, bus fare and flight tickets make the list of travel costs.
Clothing Expenses
Do you have uniforms for your staff? Do your employees need special gear and clothes in the course of discharging their duties? If yes, this a chance for some tax relief for your start-up. All the costs you incur to buy, maintain or replace the uniforms and work gear are an allowable expense. Remember to claim them from your gross income!
Staff Costs
All the money you spend to hire a good team doesn't go to waste. It's a chance for you to reduce your tax liability. Moreover, the cost of training, remunerating and motivating them also falls under staff costs, which you can claim from your revenue. The expenses you incur whenever you subcontract work to another party also fall here.
Conclusion
It is not easy to keep tabs of all your allowable expenses without proper knowledge of tax computations. You need the services of a professional tax agent who will align things and make sure that your start-up saves money on your business tax expenses.