Businesses urged to manage tax payments

Date: 14th August 2008

As the economy slows down, more and more companies are coming to realise the importance of tax planning, industry experts have claimed.

Accountancy Magazine reported that PricewaterhouseCoopers (PwC) has claimed that the credit crunch has made businesses realise the importance of managing their cash flow effectively and that one way to do this is through effective tax planning.

Accountants from the firm said that businesses should now be looking to make quarterly tax payments based on expected results, rather than budgeted figures.

What's more, the firm said that bosses should look at salary supplement arrangements as these might allow them to reduce costs without losing staff.

PwC tax director Richard Farnsworth told the magazine: "Cash is king, and with intense focus on the credit crunch, companies are starting to recognise the benefits of managing tax effectively in the downturn.

"We are also seeing more focus on areas where tax costs can be reduced."

Recently, tax professional Steve McKenzie stressed that it was an excellent idea for small business owners to consider hiring an accountant to help them with their bookkeeping and tax returns.