Probably the question we get asked the most within a4c!
Small Business Tax Relief
The government has plenty of tax reliefs available to small business owners and so we’ve listed below those most applicable to you….
(And remember, where we prepare your tax returns, we’ll include any tax reliefs applicable, as part of our tax return production process.)
You can claim Capital Allowances when you buy assets that you keep to use in your business. This includes equipment, machinery and business vehicles (known as “plant and machinery”). You can deduct some or all of the value of the item from your profits before paying tax.
Annual investment allowance
Annual Investment Allowance is a form of Capital Allowance. You can deduct the full value of an item that qualifies for AIA from your profits before tax. One major exception is business cars. The criteria is strict, so be sure to research thoroughly.
Business rates relief
Some business properties may be eligible for discounts on business rates. There are eight possible reliefs, which you apply for through your local council.
Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to £5,000. If your employers’ Class 1 National Insurance liabilities were less than £100,000 in the previous tax year, you may be eligible.
Creative Industry tax reliefs
If you are a creative business, you may be eligible for one of eight corporation tax reliefs. These allow eligible companies to claim a larger deduction or, in some circumstances, claim a payable tax credit when calculating your taxable profits.
Business Asset Disposal Relief
You may be able to pay less Capital Gains Tax when you sell all or part of your business. Business Asset Disposal Relief (previously known as Entrepreneur’s Relief) enables you to claim 10% on all gains on qualifying assets.
R&D tax credits
Research and Development (R&D) is a tax relief that can reduce a company’s tax bill or provide a cash sum based on how much a company spends on R&D. The scheme specifically looks at businesses that are advancing science or technology.
For more information on these reliefs, or other ways to save tax, then get in touch:
01737 652 852