How Much Can a Good Accountant Actually Save Me in Tax Each Year?

If you are reading this you might be wondering whether your accountant is actually helping you or just filing forms. I’ve seen so many Bedford business owners pay an accountant monthly yet still miss thousands of pounds of legal tax savings simply because nobody ever explained the rules to them.

Tax planning is not a one-size-fits-all number. It is a combination of dozens of small and large decisions throughout the year that add up to real savings. Below is the most complete list of tax-saving opportunities that a good accountant should be helping you with.

If your accountant is not discussing these areas with you regularly, you are almost certainly overpaying tax.

PART 1: TAX-SAVING AREAS FOR LIMITED COMPANIES

1. Salary and Dividend Planning

This is the foundation of tax planning for directors. The wrong mix can cost you thousands in:

• National Insurance
• Dividend tax
• Corporation tax
• Overdrawn Director’s Loan Account issues

A good accountant reviews your structure every single year because thresholds change and your profit changes.

2. Employer’s Allowance (£5,000 saving)

Many small companies forget to claim this or don’t even know it exists.

If you employ at least one person besides yourself (or structure things correctly), you can reduce your employer National Insurance bill by up to £5,000 per year.

I’ve seen clients go years without claiming this simply because their previous accountant did not activate it in payroll.

3. Trivial Benefits (£300 per director)

Trivial benefits allow you to take up to £300 per year per director completely tax free.

Most accountants don’t even mention it.

Used correctly you can reduce corporation tax and reward yourself at the same time.

4. Home Office Claims

Directors can claim for:

• Energy
• Internet use
• Office space
• Phone line
• Broadband
• Cleaning costs

Most people underclaim because they don’t know what HMRC allows.

Used correctly the home office claim reduces corporation tax every year.

5. Company Pension Contributions

Company-paid pensions are one of the largest legal tax-saving tools in the UK.

They reduce:

• Corporation tax
• Income tax
• National Insurance

A £10,000 pension contribution can save a director more than £2,500 in corporation tax alone.

I’ve seen this save clients thousands every year when done properly.

6. Capital Allowances on Equipment

This includes:

• Vans
• Tools
• Laptops
• Machinery
• Office furniture
• Specialist equipment

Most SMEs use the Annual Investment Allowance (usually 100 percent deduction).

If you are not claiming capital allowances you are overpaying corporation tax.

7. The Flat Rate VAT Scheme (FRS)

Some businesses can save thousands by switching to the Flat Rate Scheme.

Under FRS:

• You charge VAT at 20 percent
• You pay HMRC a lower flat rate percentage (depending on your industry)
• You keep the difference

This works especially well for low-expense businesses such as consultants, IT contractors, and online service providers.

However it must be planned correctly because it can backfire if used incorrectly.

8. Correct VAT Coding

Incorrect codes = overpaid VAT.

The most common Bedford problems I see:

• Using 20 percent instead of 0 percent
• Misusing exempt codes
• Claiming VAT on fuel incorrectly
• Claiming VAT on non-allowable items

Cleaning up VAT saves money instantly.

9. Claiming Pre-Trading Expenses

You can claim legitimate business expenses from the seven years before your company was formed.

Most new business owners don’t know this at all.

10. Company Cars (when strategic)

Company cars can be tax efficient when:

• The vehicle is fully electric
• Fuel benefit is avoided
• The company claims capital allowances
• Mileage tracking is done correctly

Electric company cars especially can offer massive savings because of low Benefit-in-Kind rates.

11. Mileage Reclaims for Personal Vehicles

If you use your own car:

• Claim 45p per mile (first 10,000 miles)
• Claim 25p per mile thereafter

This is tax free for you and reduces corporation tax for the company.

Most directors do not claim enough mileage.

12. Staff Rewards and Gifts

These expenses reduce corporation tax legally when:

• Structured as allowable rewards
• Not cash
• Not replacing salary

Most business owners forget they can reward staff tax efficiently.

13. Training and Development

Training related to your role is fully allowable.

Many Bedford businesses don’t reclaim VAT or expenses on training that they are absolutely entitled to.

PART 2: TAX-SAVING AREAS FOR SOLE TRADERS

1. Correct Allowable Expenses

Most sole traders underclaim because they rely on bank statements, not receipts.

You should be claiming:

• Tools
• Materials
• Uniform
• Mileage
• Software
• Subscriptions
• Advertising
• Insurance
• Phone use
• Home office

If your accountant has never reviewed your expenses, you are almost certainly overpaying.

2. Employing Your Spouse Legally

If done properly (with a real job and real pay):

• Spouse’s salary is a deductible cost
• Household income becomes more tax efficient
• National Insurance credits can be earned

A good accountant sets this up correctly so HMRC accepts it.

3. Employing Your Children Legally

If your children work in the business (mailing, admin, cleaning etc.):

• Their wages are allowable
• They use their tax-free allowance
• You reduce your taxable profit

It must be done properly to stay HMRC-compliant.

4. Home Office Claims

Sole traders can choose:

• Simplified flat rate
• Actual percentage method

A good accountant checks which method saves you the most.

5. Capital Allowances

Sole traders can claim for:

• Vans
• Tools
• Machinery
• Equipment

This reduces taxable profit immediately.

6. Using the Tax-Free Trading Allowance

If you have small side income you may use the £1,000 trading allowance.

Most accountants explain when to use it and when not to.

7. Timing of Income and Expenses

A good accountant plans:

• When to buy equipment
• When to raise invoices
• When to defer income
• When to accelerate spending

This is often the difference between paying higher rate tax or not.

PART 3: ADDITIONAL SAVINGS MANY BUSINESSES NEVER KNOW ABOUT

Here are more areas where a good accountant should be helping you save money every year.

1. Marriage Allowance

Transfers unused personal allowance between spouses.

2. Capital Gains Tax Planning

Including:

• Using both spouses’ allowances
• Timing disposals
• Reducing taxable gains

3. Loss Relief Planning

Trading losses can:

• Reduce current tax
• Reduce future tax
• Be carried back

A good accountant plans this carefully.

4. CIS Tax Reclaims for Tradespeople

Some trades earn thousands back in CIS refunds when everything is filed properly.

5. R&D Tax Relief (for eligible companies)

Not every business qualifies but when they do the savings are significant.

6. Bad Debt Relief

If a customer does not pay you, you may claim relief against VAT or tax.

7. Correcting Past Mistakes

When we take on a new client we often save them money instantly by:

• Fixing VAT
• Fixing expenses
• Fixing payroll
• Fixing dividend combinations
• Fixing Director’s Loan Accounts

These corrections can save hundreds or thousands.

THE TRUTH: A GOOD ACCOUNTANT SAVES YOU MONEY IN DOZENS OF SMALL WAYS. NOT ONE BIG WAY

This is why you cannot put a single number on tax savings.

A good accountant:

• Reduces tax
• Reduces stress
• Reduces penalties
• Reduces risk
• Avoids errors
• Improves cash flow
• Increases clarity

Every small win adds up.

The Bottom Line for Bedford Business Owners

A good accountant will save you tax every single year, but not through a magic single figure. They save you money through structure, timing, allowances, planning and proper advice.

If your accountant is not reviewing these areas with you, explaining them clearly or planning ahead, then you are not getting the full benefit — and you are likely paying more tax than you need to.