If you run a small business there are various tax breaks that exist to help save you money on your tax bill in an entirely legal and official way. We’ve listed five for you here so read on to see if any could help you add an extra few thousand pounds to the bottom line of your business.
1. Employment Allowance
As an employer you might be eligible for National Insurance relief of up to a total of £4,000.
You must have employers’ Class 1 National Insurance liabilities of less than £100,000 in the previous tax year to qualify.
If you claim Employment Allowance you are able to pay less employers’ Class 1 National Insurance every time you run your payroll until you reach the £4,000 threshold or the end of the tax year, whichever one comes sooner.
2. Small Business Rates Relief
You can get small business rates relief if your business property’s rateable value is less than £15,000. For businesses with a rateable value of less than £12,000, no business rates are paid and for those falling between £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.
You can claim if you have one business property, although you may still be eligble under certain circumstances if you have more. Contact your local council to find out more.
3. Research and Development (R&D) Tax Relief
For tax purposes, R&D takes place when a project seeks to achieve an advance in overall knowledge or capability in a field of science or technology.
According to guidance from gov.co.uk, for a project to be eligible it must relate to your company’s trade – either an existing one, or one that you intend to start up based on the results of the R&D.
To get R&D relief you need to explain how a project:
- looked for an advance in science and technology
- had to overcome uncertainty
- tried to overcome this uncertainty
- could not be easily worked out by a professional in the field
Your project may research or develop a new process, product or service or improve on an existing one.
4. Annual Investment Allowance
This type of allowance can be claimed against ‘plant and machinery’ your business owns (as oppose to hires or leases) – this could include a car, van, truck or other equipment . You can deduct the full value of an item that qualifies for annual investment allowance (AIA) from your profits before tax. There are a number of restrictions on what you can and cannot claim for so be sure to look into this in more detail first, for example here
5. Seed Enterprise Investment Scheme (SEIS)
The Seed Enterprise Investment Scheme (SEIS) rewards investors in young businesses and start-ups with tax benefits. The scheme was created to help give a boost to new enterprises by making investment in them an attractive prospect through such reliefs.
If you’d like to find out more about any of the above, or just talk to us about how you might be able to reduce your tax bill, get in touch. We’d love to hear from you