Tips for doing business in a Post-Pandemic Era
Businesses face difficulties in coping with the harsh economic winter. The number of citizens and tourists consuming goods and services in Hong Kong has decreased, and the government’s relief measures in response to the pandemic are no longer available. Additionally, tax incentives have been reduced. Surviving in business has always been more challenging than starting one, especially during an economic downturn.
The primary task for business owners is self-preservation.
Here are some strategies to consider:
- Adjusting the staff management:
Cutting costs is inevitable when the market is unfavorable. Rent and staff costs are high, so reducing staff becomes necessary.
However, indiscriminate layoffs may lead to a shortage of service personnel when business picks up again. Hiring employees is not a quick fix.
There are various staff management to explore.
For example, employees can work as self-employed individuals for the company. In this arrangement, the company does not need to provide Mandatory Provident Fund (MPF) contributions or long-term service benefits.
Employees are not required to work in the office from nine to five every day. Work arrangements can be flexible, such as working two to three days a week or being paid per project.
The concept of “slashers,” where individuals have multiple roles and professions, has gained popularity. This allows for greater flexibility and freedom in work. Maintaining good communication and cooperation between both parties ensures that there are available workers when business is booming, leading to a win-win situation.
- Maximize tax incentives:
For the 2023/24 tax year, taxpayers can still enjoy a 100% reduction in profits tax, salaries tax, and personal income tax.
However, the maximum limit has been reduced from $6,000 to $3,000 compared to the previous year. To make the most of these incentives, business owners who are also employees of their own Limited companies, along with their spouses, can deduct [LimitedCompany $3,000] + [Individual $3,000] + [Spouse’s Individual $3,000].
It’s important to note that the maximum reduction for salaries tax is calculated on an individual basis. Therefore, for married couples who choose to be jointly assessed, the maximum reduction limit would be $3,000 in total.
To optimize your tax benefits, it is recommended to consult Maxi Solution Accounting.
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