1.  Make large pension contributions

If you can afford to forego receiving income in the year you may make a contribution into a pension scheme of up to £235,000 in the tax year 2008/09 which can qualify for tax relief.

2.  Choose the business vehicle carefully

Companies tend to only have a tax advantage once profits are being made.  Any losses are carried forward to be offset against future profits.  With a sole trader or partnership any losses in the early years can be offset against your other income, or carried back against your income in the three years prior to starting the business.

3.  Pay interest on money owed to you

If you have lent money to the business or deferred dividend or bonus payment to provide additional finance to the business you can be paid interest at a commercial rate.  The interest payment is subject to income tax but not national insurance contributions so is tax efficient.

4.  Enjoy Christmas

As long as the cost per head is less than £150 you can hold an annual staff function which is not taxable on employees and you can claim full tax relief on the cost.

5.  It is good to talk

Mobile phones can be provided to employees tax free as long as it is the employer and not the employee who enters into the contract.  There are also no national insurance contribution implications for either party.  This means you may all benefit from a better contract deal and gain full tax relief on the cost.  This could be used as an alternative to a pay rise.

6.  Take advantage of childcare vouchers

You can partly remunerate your staff who are parents with childcare vouchers which are free of both tax and national insurance contributions.  You have to offer childcare vouchers to all your employees who work at the same site and the vouchers are not exchangeable for cash.