Corporate Tax Management is an effective way of improving tax efficiency by creating an interconnected set of rules and procedures with regards to the company, the revenue it generates and its specific expenses. A tax advisor can efficiently help in improving corporate tax management by suggesting the most appropriate tax strategy that applies to a given company. The taxation issues of companies in the UK are unique and need professional expertise and advice on tax planning and compliance. Corporate tax law is constantly evolving and UK accounting firms can offer their clients access to experts who can effectively handle and understand UK tax laws.
Comprehensive Corporate Tax Management Strategy
A comprehensive corporate tax management strategy implies not only the creation of a favourable corporate structure that minimises internal cost but also provides for the smooth operation of its day-to-day operations. Therefore, a sound plan is required in order to maximize the benefits from a business tax structure that is favourable to the parent company. There are multiple aspects of corporate governance that require careful attention. These include corporate investment objectives, ownership structure, financing, transfer of assets, international business activities, ownership of intangibles and intangible assets, acquisitions and divestitures, joint ventures, ownership of investments, mergers and acquisitions, employee benefits, marketing, trading, protection and litigation. A qualified and experienced tax advisor can help his or her client to devise a suitable corporate governance plan that meets their needs.
Transfer of Various Resources
Corporate tax management also involves the transfer of various resources between the business and the parent company. This includes through the creation of limited liability partnerships (LLPs), share ownership, placement of shares in additional shares in a corporation (CPS), assignment of stock in a corporation (SOC) and transfer of direct investments in entities such as partnerships (DMOs). In addition to these transfers, there are other processes that should be included in a comprehensive corporate governance plan, such as the preparation of an annual budget, assessment of risks in the business, the allocation of staff resources, decision on acquisitions, partnering with others in the growth of the enterprise, allocation of prize bonds to satisfy tax obligations, and the preparation of an exit strategy. All of these processes are necessary for long-term viability and growth. However, it is often the case that these processes may not always be followed correctly because of lack of expertise alone.
Maintain Proper Corporate Governance
Companies must make sure that they maintain proper corporate governance procedures and practices if they wish to be successful in their business ventures. They have to make sure that all their decisions are based on facts and not on the advice of a consultant. Their bottom-line performance has to be excellent in order to attract investors and retain their customers. Also, it is important to know what kind of penalties they could be faced with if they fail to meet their commitment to shareholders and creditors. A company must have proper and well-established procedures and practices in place if it wants to ensure its long-term viability and growth.
Best Way to Achieve Long-Term Tax Management
The best way to achieve long-term tax management and growth is to hire expert corporate governance advisors who can help you develop policies and programs to achieve your long-term goals. This is where most companies go wrong. They either do not have a corporate governance policy or a corporate governance advisor and as a result do not implement policies effectively to ensure better corporate governance.
Enjoy Better Bottom-Line Performance
If this happens, then the company would not enjoy better bottom-line performance. One of the main functions of corporate governance advisors is to help a company come up with and implement policies that will enhance its bottom-line performance. They can also help a company to come up with strategies to minimize its tax liabilities by structuring its businesses in a manner that reduces its taxable income. Moreover, corporate governance policies can also help a company reduce its tax liabilities by changing its ownership structure. This can further reduce its taxable income.
Corporation from Being Subjected to Excessive Taxation
In addition, if the company’s boards of directors are also strong enough, they can prevent the corporation from being subjected to excessive taxation. When a corporation’s owners are constantly making decisions that would ultimately affect its taxable income, then it is obvious for the government to increase taxes on the corporation. A corporate tax planning advisor can help a company to come up with the right strategy to avoid such problems. This will ensure that the company’s bottom-line performance and shareholder wealth remain unaffected.
Conclusion
The bottom-line is that a company must be in some form of corporate tax management to attract investment and retain qualified personnel. Without the correct corporate tax structures, a company’s potential for future growth is severely hampered. For instance, a company with no corporate tax management can invest in a company that it owns in a lower tax jurisdiction without having to pay out much in taxes since it will be paying a portion of the profits anyway. On the other hand, a company with good corporate tax management can attract investment and retain top management which enables it to grow both vertically and horizontally within the industry.
