Are you a small business owner thinking about reinvesting your tax rebate?
If there’s one thing better than finding you’ve saved enough money during the business year to pay your taxes, it’s finding you actually paid too much.
In this case, you could end up with a nice lump of cash that you didn’t expect to have.
You can always just take your family out to dinner or book a weekend away, but there are plenty of better ways of reinvesting your tax rebate.
Put the money in an ISA
When you put money into a standard savings account, you pay tax on the interest you earn.
This can be annoying, but you can avoid the inconvenience by putting your rebate into an ISA. These are tax-free up to a certain amount (£15,240 for 2016/17).
ISAs are a great way to invest unnecessary tax savings, since the yearly allowance resets at the beginning of each tax year.
Upgrade your technology
If you run a small business, you probably rely on a computer.
Unfortunately, a fast computer that’s able to handle being used every day usually costs a pretty penny, especially if you need it for high-end applications, so it can be tough to budget for a new one.
Consider reinvesting your rebate by upgrading to a newer piece of technology that might otherwise have taken a healthy bite out of your monthly budget.
Invest in a course or business product
One of the best reasons to pick up a new piece of technology with your rebate is that it’s a rare cost, just like the rebate is, at best, a once-a-year bonus.
In the same vein, you could think about courses and products that will improve your business but are fairly costly.
For a small business owner, it can be hard to keep your skills sharp while still running everyday operations, so this is a great opportunity.
Nothing feels more demoralising than continuing a business that owes more than a little bit of money. When this happens, it can feel like you’re working for the banks rather than taking in money for yourself.
It might not sound like a particularly exciting way to use your rebate, but paying off your debts can be a great way to kick off the new tax year.
If you’re currently debt-free but are always just on the edge of going into the red each month, consider placing the money into an easy access account to provide a little cushion for tough times.
Top up your retirement fund
As a small business owner, the government should provide its own contribution whenever you add money to your retirement plan.
If your tax rebate wasn’t big enough to do anything too significant, help make sure your nest is properly feathered by reinvesting your tax rebate towards your retirement.
Reinvesting your tax rebate as a small business owner
Consider one of these methods of reinvesting your tax rebate if you want to see valuable results.
If you’d like more advice on how to reinvest your tax rebate, get in touch with us – we’re always happy to help.