Tax Advice

Saving on taxes is secondary. Your primary goal should be making, and saving, money. And it’s not as hard as you might think.

In days gone by, some very clever people devised elaborate schemes to try and avoid tax. Some of them worked, but only for a while. The laws changed to close the loopholes. In addition, the benefits were not as lucrative as promised.

In short, complex tax-saving schemes are not as popular as they used to be, and the simple tax planning strategies have remained. Nonetheless, to many people, they still seem complicated.

“Why are tax plans beneficial in the first place?” they ask.

The answer, of course, is to save money. But it should always be remembered that tax saving is secondary. Creating wealth is the ultimate goal.

Here are some simple steps that will help you create wealth every day:

• Be productive

Many people are less efficient than they could be. They waste too much time. To be productive, you need to plan ahead. In this way, you can anticipate problems before they arise. This saves time, and ‘time is money’.

• Use downtime effectively

Use less busy periods to do preventative maintenance. This helps prevent machines and equipment from breaking down, so things run smoothly and the enterprise remains active and busy. Preventative maintenance also extends the life of the equipment, saving money in the long run.

• Know the weakness of the system, and plan around that

For example, phone lines and Internet connections can be interrupted. Back up batteries and spare modems can keep the lines of communication open.

• Be as compliant as you can be

True liberty is complying with the law. Doing so will result in fewer worries and concerns. This frees up positive energy and time to focus on the moneymaking aspects of the business.

• Take care with your relationships

Personal relationships affect your mood to a large degree. Keep them as positive as possible. Relationships with clients and staff are equally important.

Take time to listen to a client; it will pay dividends in terms of current and future business. This can translate into wealth.

With a solid reputation due to integrity and a good listening style, your personal goodwill will increase. This will directly affect the value of your business.

• Stay healthy

Rest, exercise and enough sunlight gives rise to a better outlook on life. Making the effort to be creative also pays off. All of this will translate into clear thinking, greater energy, speed and efficiency. And these are tools that can end up helping you make more money.

• Use your common sense

A lack of common sense is a liability in business. Make a point of applying practical, workable solutions to problems.

by peter o’halloranAdvocate Peter O’Halloran is a tax specialist. Email him at farmersweekly@caxton.co.za. Subject line: Tax.