Tax Planning: Simple Strategies for Treasury Professionals

When it comes to managing a company’s cash, tax is the biggest hidden drain. A good tax plan can shave thousands off your bill without breaking any rules. Below you’ll find down‑to‑earth steps you can start using today, whether you run a mid‑size firm or a small treasury desk.

First, stop treating tax as an after‑thought. Every major decision – a new investment, a dividend payout, or a restructuring – should be filtered through a tax lens. That way you avoid surprise levies at year‑end and keep more cash flowing back into the business.

Key Tax Reliefs You Should Know

The UK tax code is full of reliefs that most treasury teams overlook. The most common ones are:

• Annual Investment Allowance (AIA): Allows you to claim 100% of qualifying capital expenditure up to £1 million in the year you buy the asset.
• Research & Development (R&D) Tax Credit: Gives a cash credit or enhanced deduction for qualifying R&D spend – a gold mine for tech‑focused firms.
• Employer‑Provided Benefits: Certain small‑business benefits (like health checks or childcare vouchers) are tax‑free up to set limits.
• Loss Carry‑Forward: If you posted a loss, you can offset it against future profits for up to 20 years, reducing corporation tax when you bounce back.

Make a checklist of these reliefs and run it through every budget cycle. Ask your tax adviser to confirm eligibility – a few minutes of work now can save you tens of thousands later.

How to Build a Year‑Round Tax Plan

Tax planning isn’t a once‑a‑year to‑do list; it’s a continuous habit. Start by mapping out the fiscal calendar: quarterly VAT returns, corporation tax instalments, and the year‑end filing deadline. Slot in specific actions for each quarter – for example, schedule an AIA claim when you order new equipment in Q2.

Next, create a “tax dashboard” in your treasury system. Track key metrics like effective tax rate, total reliefs claimed, and cash tied up in deferred tax. Seeing the numbers in real time lets you spot a rising tax burden before it becomes a crisis.

Don’t forget personal tax for senior staff. Salary‑vs‑dividend optimisation can shave a lot off personal tax bills and, indirectly, the company’s NIC costs. Use a simple calculator to compare the two routes for each director and pick the cheaper mix.

Finally, review your plan after any major change – a merger, a new product line, or a shift in financing. Each trigger can open a fresh set of reliefs or expose a new liability. Keep your tax adviser in the loop and adjust the dashboard accordingly.

By staying proactive, you turn tax from a dreaded surprise into a predictable element of cash flow. That gives you room to reinvest, pay down debt, or boost shareholder returns.

Remember, tax rules evolve. The UK budget is announced each spring, and new reliefs can appear overnight. Subscribe to HMRC updates, and set a monthly 15‑minute “tax watch” meeting with your finance team. Small, consistent effort beats frantic firefighting at year‑end.

Bottom line: tax planning is just another part of treasury risk‑management. Treat it like any other financial risk – measure it, monitor it, and mitigate it with the right tools. Your balance sheet will thank you, and so will your boss.