That title might sound like an obvious thing to say, but sometimes we need reminding of the obvious.

Nothing is certain but death and taxes, so the proverb goes.  Some things are inevitable and taxes are one of those things.

Nevertheless, it seems most people dislike paying taxes and many would like to avoid them at all costs.  I am sure all accountants sigh when yet another client says to them that they do not want to pay any tax.

The fact is if you want to make money from your business, which presumably you do otherwise you wouldn’t have started a business in the first place, then you will pay tax.

So why not look at paying taxes as a positive thing instead of a negative one?
As a sole trader how much profit would you need to make to not pay any tax?
In the current tax year (2012/13) and assuming you have no other income £8105, or £156 per week.

Not a lot is it when you consider what you could buy with that amount of money?

Wouldn’t you rather, for example double your profits to £16210?  You would pay tax on £8105, of 20%, that’s £1621 and national insurance of £912.

So now that leaves the amount in your pocket of £13677 or £263 per week.  Sounds better doesn’t it?  And you’ve paid tax.  But now you have over a £100 more per week to spend.

So, do you get the point?
If you don’t want to pay tax, fine, but it’s unlikely you will be making an income you can live on.

Taxes = Profits

Profits = A Good Thing

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