One of our guiding principles is that we consistently work to ensure our clients do not pay a penny more tax than they need to. All legitimately of course. We don’t do “dodgy” as I tell all our new clients. I want clients who can sleep at night without worrying that some artificial tax scheme which has apparently saved them a lot of tax might not fall apart when challenged by HMRC.
But sometimes accountants can be so focused on minimising costs and tax (we are very good at that) that we forget that the real aim is to maximise after tax profits, not just this year but over the long term.
If spending money now will have a real expectation of increasing turnover and profit in the future then increased costs could be good not bad. And ultimately if a business has a substantial tax bill it usually also means that its profits are very healthy.
So I think we should be spending as much time aiming to maximise profitability as minimising tax. That way we still end up with more profit after tax.
It’s a tough year to try and increase profitability for many businesses but too easy to fall into a mindset of thinking it cannot be done. We’ve just spent two days on intensive strategic thinking for Morgan Cameron with Mark Lloydbottom a leading expert in our industry. It was challenging, thought-provoking and will hopefully change the way we do things for the better.
Do you need to stop and take a strategic look at your business? If so, we’re here to help you through that process.
The challenge is, can you afford not to?