They say two things in life are certain, death and taxes, but it has also been rightly said that while you must pay any tax you owe there is no need to leave a tip; indeed by taking the appropriate advice you may be able to not only reduce your tax obligations, but also claim some valuable reliefs.

How you structure your business from the outset will determine how much and what type of taxes you pay. Sole traders and partnerships pay income tax on their profits, whereas a limited company pays corporation tax.

As a sole trader, there is no legal distinction between your business and private affairs. This means that the individual is personally liable for any business debts, whereas a shareholder is only liable for company debts up to the amount of any share capital that they own. Limited liability can be one of the main advantages of choosing to run your business as a limited company rather than as a sole trader or partnership.

A limited company is a separate legal entity from its shareholders and directors. The shareholders’ and directors’ personal assets are not available to meet the debts of the company. However, the money and assets of the company belong to the company rather than to the shareholders.

In many businesses who have been set up fairly loosely, such as a family concern, keeping a clear demarcation between what belongs to the business and what can be used for personal benefit can cause difficulty. The small shopkeeper dipping into his till for day to day expenses needs to be careful, likewise the amount of private mileage a company’s vehicles is used for; careful records must be kept.

Many businesses start out as a sole trader or a partnership and then as they grow change their status, to become a limited company. However, there may still be income tax to pay on profits extracted from a limited company and where those profits are extracted in the form of a salary or bonus, Class 1 NICs.

Gains realised by individuals are liable to capital gains tax, whereas a company pays corporation tax on chargeable gains. All businesses with turnover of VAT taxable goods and services above the VAT registration threshold (£83,000 from 1 April 2016) must register for VAT.

Tax can be quite complex, from the self-employed individual, able to express their income and expenditure and thus their liabilities fairly simply, paying income tax on the balance, to huge corporations with a team of in-house taxation specialists, but whatever your size of business, recent news stories warn all businesses to keep detailed accounts and to pay all tax due, or risk prosecution.

This detailed record keeping should be seen as an opportunity to review your business structure and practices to ensure that your business is structured in the most tax effective manner, and that you are claiming for all the reliefs and allowances available.

Two widely available but frequently misunderstood reliefs are Capital Allowances and R&D Tax Credits.

For example, if you have spent money on improving your commercial property by installing new fittings, plumbing or other permanent improvements. If you have invested in new equipment including fleet, tools or other capital equipment, and which business hasn’t? You may well be entitled to make a claim for Capital Allowances

Alternatively if you have invested in developing new products, processes or services you may be able to receive a cash payment or tax deduction, as up to 33.35% of a company’s R&D spend being available as a cash repayment from HM Revenue & Customs (HMRC).

This where you will need the help of a good accountant, although not every generalist accountant will have expertise in every area of taxation and reliefs. Over the last few years new taxes, pension arrangements and reliefs to encourage businesses and commercial property owners and innovators to invest have been introduced and enlarged upon, so if you feel that your business may qualify for Capital Allowances or R &D Tax Credits, have a word with your accountant or a specialist who will work with him to prepare a claim.

Many of us are not aware of how simple it is to claim these reliefs, but a quick call to a specialist advisor will enable them to advise whether your expenditure meets the qualifying criteria for a claim.

After all, if you pay everything that’s due, it is only prudent to make sure that you are getting back everything that’s due to your business.