10 Essential Tax Savings Strategies Every Agency Must Know [2025 Guide]

Let's talk about something that makes most agency owners groan: maximising tax savings.

I get it. When you're juggling client deadlines, managing your team, and trying to grow your business, finding tax savings opportunities rarely makes it to the top of your to-do list.

But here's the thing - I've seen countless agencies leave thousands in potential tax savings on the table simply because they treat tax planning as an afterthought.

Back when I was at EY, I worked with massive corporations that had entire departments dedicated to tax savings strategies. Now, running Sidekick and working directly with agencies, I've learned how to adapt those same powerful tax savings approaches for growing agencies.

Let's break down the strategies that actually work to maximise your tax savings.

1. Choosing the Right Business Structure (And Knowing When to Change It)

Think of your business structure as the foundation of a house. You might start with a simple structure that works fine for a small home, but as you add extensions and floors (or in your case, team members and services), that original foundation might not be optimised for tax savings anymore.

I've seen too many agency owners stick with their original business structure simply because it's familiar. Meanwhile, they're missing out on thousands in potential tax savings.

What You Can Do

Start by answering these questions:

• Are you still operating as a sole trader when you could benefit from a limited company's tax savings?
• Could a holding company structure protect your assets better while optimising tax efficiency?
• Are you extracting profits in the most tax-efficient way?

The right structure begins with creating a foundation that supports your growth plans while keeping more money in your business.

2. R&D Tax Credits (Yes, Agencies Can Claim These!)

Here's something that surprises most agency owners: the innovative work you're doing for clients? A lot of it might qualify for R&D tax credits, offering significant tax savings opportunities. I'm not talking about lab coats and test tubes - I'm talking about the creative problem-solving you do every day.

Last month, I helped an agency realise £66,362 in tax savings for work they were already doing. They just hadn't realised it qualified as R&D.

What You Can Do

Start documenting when you:

• Develop new approaches to solve client problems
• Create custom tools or processes
• Tackle technical uncertainties in projects
• Push the boundaries of what's possible in your field

The key is knowing what counts as R&D and having the right documentation to maximise your tax savings.

3. Smart Expense Timing (It's Not Just About What You Spend)

Imagine you're planning to invest in new equipment or software subscriptions. The timing of these purchases can make a significant difference to your tax savings.

What You Can Do

Before making any major purchases, ask yourself:

• Would this expense create better tax savings in the current or next tax year?
• Can you time investments to align with your profit patterns?
• Are there annual payments you could make monthly (or vice versa)?

Small timing changes can lead to substantial tax savings.

4. Getting VAT Right (Especially If You Work Internationally)

VAT might seem simple, but it's often a bigger opportunity for tax savings than most realise. This is especially true if you work with international clients or offer digital services. Getting your VAT strategy right can improve your cash flow and reduce your admin headaches while maximising tax savings.

What You Can Do

Look at:

• Which VAT scheme offers the best tax savings for your business
• How to handle international client billing properly
• Whether you're reclaiming all the VAT you can
• If your current VAT return frequency is optimised for cash flow

5. Employee Benefits (Keep Your Team Happy and Increase Tax Savings)

Here's a win-win situation: you can attract and retain better talent while increasing your tax savings. Many agencies focus purely on salaries, missing out on tax-efficient benefits that could save money for both the business and their team.

What You Can Do

Consider offering these tax-efficient benefits:

• Electric car schemes
• Bike-to-work programmes
• Health and wellness benefits
• Training and development allowances
• Mobile phone contracts

The trick is choosing benefits that your team will value while maximising tax savings opportunities.

6. Equipment and Technology Investments (Maximising Tax Savings on Big Purchases)

Let's be real - running an agency means constantly investing in technology and equipment. Whether it's new computers, software, or studio gear, these purchases eat into your profits. But with the right approach, they can actually create significant tax savings opportunities.

What You Can Do

Before your next big purchase, consider these tax savings strategies:

• Whether to buy outright or lease (both offer different tax savings potential)
• If you could benefit from the Annual Investment Allowance for immediate tax savings
• The best timing for major purchases to optimise tax savings
• Whether your current equipment tracking system is optimised

Remember, be smart about how and when you buy new equipment to maximise tax savings.

7. International Tax Planning (Optimising Tax Savings Across Borders)

Working with international clients is great for business, but it can create tax headaches if you're not careful. I've seen agencies miss out on tax savings opportunities - or worse, pay tax twice on the same income - simply because they didn't understand international tax rules.

What You Can Do

Get clear on these tax savings opportunities:

• Where your clients are based and what that means for tax optimisation
• How to structure international payments for maximum tax efficiency
• Which countries have tax agreements with the UK for better savings
• When you might need localised tax savings advice

A little planning here can lead to substantial tax savings later.

8. Office and Workspace Tax Savings (Maximising Claims Wherever You Work)

Whether you're working from home, a fancy office, or a mix of both, there are significant tax savings to be found. This has become even more relevant since the rise of hybrid working. Many agencies miss out on these tax savings because they don't know what they can claim.

What You Can Do

Look into these tax savings opportunities:

• Home office allowances for you and your team
• How to optimise claims for shared workspaces
• What portions of rent or mortgage can be offset for tax savings
• Utility and internet cost optimisation
• Office improvement tax benefits

Even small claims can add up to significant tax savings over the year.

9. Pension Planning (Long-term Tax Savings That Start Now)

Here's something I wish more agency owners knew: pension contributions can be one of the most effective tax savings strategies to extract money from your business, saving you corporate and personal tax. 

What You Can Do

Consider these tax savings approaches:

• Setting up a company pension scheme for optimal tax efficiency
• Making employer contributions instead of taking higher salary
• Using pension contributions to maximise tax savings
• Planning personal and company contributions for best tax outcomes
• Get professional pension advice (it’s tax-deductible too!)

This is one area where long-term planning really maximises tax savings.

10. Proactive Tax Planning (Maximising Year-Round Tax Savings)

Too many agencies only consider tax savings when their accountant asks for year-end information. By then, you've missed the boat to take advantage of tax savings opportunities and are simply filing the paperwork. The most successful agencies I work with make tax savings strategies a regular part of their business planning.

What You Can Do

Make these tax savings habits regular practice:

• Review your tax position quarterly
• Keep an eye on upcoming tax legislation changes
• Plan major decisions with tax savings in mind
• Track your tax savings against targets

Making Tax Savings Work for Your Agency

Look, I know tax planning isn't the most exciting part of running an agency. But I've seen firsthand how these tax savings strategies can transform an agency's finances. The key is to start small - pick one or two opportunities that resonate with your current situation and begin there.

You don’t need aggressive schemes and you don’t need to take giant risks with HMRC. Effective tax savings comes from understanding the rules of the game and optimising them for your business.

Next Steps for Maximising Your Tax Savings

Start by reviewing which of these tax savings strategies could have the biggest impact on your agency. Sometimes the simplest changes can lead to the most significant tax savings. And don't be afraid to ask for help - tax rules are complex and constantly changing.

The sooner you start implementing these tax savings strategies, the more you'll save. And isn't that money better spent on growing your agency?

Don't wait until tax season to start saving money. At Sidekick Accounting, we help agency owners implement these strategies year-round, ensuring you never miss an opportunity to keep more of what you earn.

→ Book Your Tax Savings Discovery Session