Whether you’re a new starter or an established business, here are some often forgotten tax deductions that could free up money to put back into your business:
Annual Investment Allowance (AIA)
You can claim 100% tax relief on any assets that you own (not lease) which qualify as machinery and plant. The rules are quite stringent (for instance, company cars do not qualify), but it’s worth asking your accountant about AIA.
Employment Allowance reduces the amount of National Insurance you have to pay each year by up to £3,000, by claiming the allowance via payroll. You cannot claim Employment Allowance if your company has only one employee or director.
Enhanced Capital Allowance (ECA)
This tax break relates to certain energy saving equipment, such as electric or hybrid cars, water saving technology or certain boilers and motors. This is a first year allowance, so you can deduct the full cost from your first year profits before tax, or in subsequent years using writing down allowances.
Investment schemes: SEIS and EIS
Looking for outside investment? Tax breaks can be given to potential investors using a Seed Enterprise Investment Scheme (SEIS) for new companies, or an Enterprise Investment Scheme (EIS) for all SMEs. These schemes give income tax and CGT relief to investors, which may be a tempting opportunity; however the rules and procedures are very strict and must be approved by HMRC. It’s best to ask your accountant if these schemes would work for you.
R&D tax credits
You may have heard a lot about R&D tax credits going unclaimed. Even if you aren’t a mad scientist, it’s worth asking for advice from a tax expert to see if you can benefit from this incentive. Businesses in industries including agriculture, e-commerce and real estate have all made successful claims for employment costs, materials and consumables and software.
The Next Steps
Of course, a good accountant will check no possible tax deductions are forgotten. At Bennett Verby, we pride ourselves on looking for all the available savings we can make for you, to make sure you pay exactly the right amount of tax, no more and no less.
You should always seek advice about your specific requirements before you act. Speak to one of our experts on 0161 476 9000 or contact us here.