Tax planning strategies: Maximise savings and stay compliant

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• Tax planning essentials: Tax planning is crucial for both businesses and individuals to ensure compliance, optimise tax efficiency, and minimise liabilities. This involves strategic structuring of finances and awareness of local tax laws.
• Key business strategies: Companies should focus on choosing the right business structure, maximising deductions, leveraging tax credits, and ensuring international tax compliance. Keeping meticulous records and working with tax professionals are essential best practices.
• Individual tax considerations: Individuals can reduce tax burdens through strategies like understanding tax brackets, contributing to tax-advantaged accounts, and planning for retirement and inheritance tax liabilities. Staying compliant is essential to avoid penalties.

American statesman Benjamin Franklin is famously quoted as saying, “In this world, nothing can be said to be certain, except death and taxes.” And he wasn’t far off. For businesses of any kind, no matter where in the world they operate, paying taxes is a non-negotiable, and something that needs to be carefully planned for.

Global businesses need to be aware of all the taxes for which they are liable. They should also be conscious of how tax laws differ between countries and the various requirements in each location where they operate.

Compliance with tax laws should be paramount for businesses. To remain financially savvy when planning taxes, organisations are advised to take the opportunity to fully understand the payments they’re making and identify areas in which costs can be reduced or saved.

Tax planning is also crucial for individuals, especially those living and working outside their home countries.

What is tax planning?

At its core, tax planning is the strategic management of tax payments to ensure full compliance and streamline efficiency, while minimising expenditure each year.

For businesses, tax planning means ensuring your business complies with all tax laws, while optimising the amount of tax your pay.

For individuals, creating a solid tax strategy means structuring your personal finances in a way that ensures compliance with tax laws, as well as in the way that is most financially beneficial to you.

Importance of tax planning

One of the main reasons effective tax planning is essential is to maximise deductions and credits. Business owners should stay up to date on all available tax deductions their business qualifies for to ensure they don't miss out on potential savings.

Forbes notes that an efficient tax strategy can involve deducting operational expenses and taking advantage of tax credits for research and development. Depending on what locations a business is operating in, strategies such as and the Augusta Rule in the US, or reducing your capital gains tax by using the CGT allowance, in the UK.

Key principles of tax planning

Compliance

Compliance should be at the heart of any business strategy. Adhering to all local laws and regulations regarding tax is crucial to the success of your business. While SMEs are estimated to dodge £4.4 billion worth of tax in the UK annually, the price for those caught for tax evasion and non-compliance is high.

In the second half of 2022, HMRC (His Majesty’s Revenue and Customs) issued fines of £3.2 million to 419 businesses for failing to follow the Anti-Money Laundering (AML) regulations. Over 200 of the worst offenders were also named publicly.

Efficiency

Tax efficiency means legally and compliantly structuring your business to ensure you are liable for the least tax possible. This practice is perfectly lawful, as long as the utmost care is taken to ensure compliance with tax laws. Efficiency is a key aim of tax planning.

Tax planning for businesses

Choosing the right business structure

When choosing the right structure for your business, it’s important to understand your options. When considering the tax implications of your business structure, you should research the business structure options available in your region. Some options include the following.

• Sole proprietorships are straightforward. However, they offer no liability protection. If you’re a sole trader in the UK, you will need to pay income tax and National Insurance subject to thresholds for profit generated.
• Limited Liability Corporations (LLCs) in the US, or Limited Liability Partnerships (LLPs) in the UK, provide liability protection with flexible taxation. As in an ordinary partnership, the partners’ share of profit is taxed as income. Each partner needs to register as self-employed with their country’s taxation authority.
• In the US, S-Corps avoid double taxation but have ownership restrictions, while C-Corps offer strong potential for growth, while incurring double taxation.

Maximising business deductions

Operating expenses and depreciation

Remember that, as a business, you can deduct necessary expenses such as rent, utilities, and equipment costs. Depreciation will spread large purchases over time. In many places, the use of home offices can qualify for deduction.

Employee benefits and compensation strategies

You can leverage tax deductible benefits to boost your deductions while attracting and retaining top talent.

Tax credits and incentives

A key element of tax planning is being aware of all available tax credits and incentives that your business can benefit from in your country or countries of operation. These can include research and development incentives, and tax credits specifically for SMEs.

International tax considerations

Taxation for global businesses

If you are doing business in multiple regions, you need to be aware that there may be taxes on foreign income. You should also ensure that all your business entities are acting in accordance with the tax laws of the countries in which they are registered.

Aligning with tax compliance and filing best practices

Keeping meticulous records

Make sure that you keep rigorous documentation and records of all your business’ financial dealings, so that audits go smoothly and you remain compliant.

Understanding tax deadlines and extensions

Avoid late penalties and compliance risks by ensuring you’re conscious of all key filing dates.

Work with experts

Enlist the help of professionals to ensure your business remains in total compliance and does not miss any key details, requirements, or deadlines due to human error or strained resources.

Tune in to policy changes and future updates

Tax law changes

Businesses should make sure they monitor legislative updates and adapt their tax planning strategies in line with any changes.

Prepare of economic shifts

Work with tax experts to foresee economic trends and inflation patterns. This will help your business to plan long-term.

Utilise technology.

State-of-the-art accounting software and AI tax tools are available to help your business to streamline compliance and tax planning.

Tax planning for individuals

Tax planning is just as essential for individuals as for businesses. Individuals, no matter their status, are subject to scrutiny by the tax authorities. Whether you're a higher rate tax payer or on a lower tier, you need to comply.

In 2019, authorities fined football star Cristiano Ronaldo €18.8 million for tax evasion.

So, ensuring you are 100% tax compliant is a must. At the same time, that doesn’t mean that you shouldn’t consider compliant strategies for alleviating your tax burden.

Income tax strategies

Understanding tax brackets and rates

In the US and UK, the tax system is progressive. This means that income is taxed according to tiered amounts. Being aware of what tax bracket you fall into helps with strategic planning.

Contributing to tax advantaged accounts

Contributing to accounts that are tax advantaged, like retirement funds, is a great way to reduce your tax burden.

Retirement and estate planning

Be aware of withdrawal thresholds when accessing pensions. For example, in the UK, withdrawals over 25% of the lump sum are taxable. Lifetime ISAs (LISAs) grow tax-free but come with contribution limits and restrictions.

Another example is being aware of the difference between state pensions and private pensions, as private pensions will require strategic withdrawal planning to minimise tax. Inheritance tax is also something to be aware of.

In the UK, estates surpassing £325,000 are taxed at 40%. However, gifting assets reduce liability.

Where to go for support

Remaining tax compliant, especially across multiple regions, can be challenging for businesses and individuals. But with the right support, processes can be streamlined and strategies put in place to maximise efficiency and guarantee compliance.

With almost thirty years of experience in global compliance, Mauve Group is a global employment solutions provider. Mauve offers a dynamic suite of services to support growing businesses to succeed internationally. Mauve operates in 150+ countries and owns entities in over 70.

Mauve Group is a leading provider of Employer of Record, Global Business Expansion, and Global Payroll solutions. Led by CEO and co-founder Ann Ellis, the team at Mauve learned its expertise first-hand, from the company’s own global expansion.

When navigating tax efficiency and compliance, it's helpful to know that you’ll always have a human being there to answer your queries. Mauve's global network of payroll experts ensures compliance with local regulations and processes. Our team's remit covers banking, tax, and statutory payroll contributions.

Mauve’s Global Payroll solution generates salary calculations. These include taxes and other mandatory contributions, giving a detailed view of employment costs for a new hire.

We also have a dedicated Legal and Compliance team which supports our Global Payroll team to follow payroll laws in the countries where we offer solutions.

Mauve Group has a range of solutions for paying both salary and taxes on behalf of our clients. We can also provide guidance on permanent establishment risks as they relate to corporation tax liabilities. Mauve can also advise on tax residency rules in different countries in relation to employees who spend periods of time working from abroad.

For more information, check out our article, Top tax compliances services for businesses in 2025.

Contact our team today to find out how we can support your business to stay compliant no matter where you’re operating.

Frequently asked questions

Why is tax planning important for businesses and individuals?

Proper tax planning helps businesses and individuals reduce unnecessary tax burdens while remaining compliant with local laws. A well-structured tax strategy ensures that companies maximise deductions, take advantage of incentives, and minimise liabilities, while individuals can use legal methods to optimise income tax and retirement savings.

How can businesses develop an effective tax strategy?

Businesses can create a strong tax strategy by choosing the right legal structure, keeping accurate records, utilising available deductions, and staying updated on tax law changes. Effective tax planning also involves consulting with tax professionals to ensure compliance across multiple jurisdictions while optimising financial outcomes.

How can individuals optimise their tax strategy through tax planning?

Individuals can enhance their tax strategy by understanding their tax brackets, contributing to tax-advantaged accounts (like retirement funds), and strategically timing income and deductions. Effective tax planning also includes estate planning to reduce inheritance tax liabilities and ensuring compliance with local tax laws to avoid penalties.

Have more questions? Contact our experts.