Explore all the allowances and reliefs that are available to you
Your financial success demands expert guidance
Tax never gets simpler. Currently there are over 100 different taxes covering individuals, companies, partnerships, charities, trusts and many more structures. The last finance act was almost 700 pages long. And of course they change every year depending on which government is in power and what objectives they have.
So how do you know if you are utilising all of the tax reliefs available to you?
Could you be paying more tax than you need to?
Are your affairs structured in a tax efficient manner?
The answer for most clients is a tax planning review. The goal is to identify areas where your tax could be reduced, or the structure of your affairs could be improved to achieve your goals and aspirations.
Completing a tax planning review with us will involve working closely with you to mitigate your tax exposure.
Here are quick guidance notes to highlight important tax reliefs accessible to businesses. However, this doesn’t replace a personal conversation with a skilled accountant. Each tax relief requires individual exploration tailored to you and your business.
As featured in The Sunday Times
Tax reliefs and allowances for businesses
Tax-deductible business expenses
The world evolves and expenses which were once not deemed to be tax deductible should be revisited with a 21st century view.
A tax case in the 1960s determined that a businessperson cannot claim tax relief for the cost of a suit – at a time when people wore suits everywhere and everyday.
In the modern world, a claim for tax relief on a suit which is used to give a good impression for business should be viewed differently.
All expenses be they for a home office, business attire, travel etc should be considered in isolation and in context of your business.
Make the most of business expenses to manage your tax liabilities.
Research and Development tax credits
Research and Development (R&D) Tax is no longer just available to those who are developing cutting edge innovation. It is now applicable to a much wider range of industries and situations that you may be able to make a claim and save some significant amounts of tax.
Research and Development expenditure is a government incentive to encourage businesses to invest in improving their products or their business.
New rules have come into effect from 1 April 2023 which can add complexity, but relief can still be utilised where appropriate.
The key is to think of the tax relief as an incentive for ‘IDEAS’ that you come up with which help you to improve the business efficiency, for new products and services, or potentially just to improve profitability.
Inheritance Tax planning
With no action your family might pay 40% Inheritance Tax on value which you have worked hard to earn, tax can be paid twice on the same income. Once when it is earned and then again when you die.
We can help you to claim reliefs and to restructure your financial affairs to ensure that you do not have to pay what remains a voluntary tax.
Corporation Tax relief
Corporation tax relief involves the government reducing the amount of tax that a company needs to pay on its profits. It’s like a deduction or discount on the taxes a company owes, which can help you keep more of your earnings to reinvest in the business or expand. This relief is often given for specific reasons, like investing in certain areas or industries, to encourage economic growth and job creation.
Pre-trading expenses
Pre-trading expenses are costs that a business incurs before it officially starts operating and generating income. These expenses are typically related to setting up the business, like buying equipment or conducting market research. They can often be deducted from the business’s profits for tax purposes, helping you save money when it begins making income.
Reclaiming VAT
Reclaiming VAT (Value Added Tax) is the process of getting back the tax that your business has paid on its purchases. If your business is registered for VAT, you can usually recover the VAT you have paid on goods and services. This helps your business reduce its costs and manage its finances more effectively.
Corporation Tax on Business Sales and Property Sales
There are valuable Government approved reliefs to encourage business and entrepreneurs – if you are selling an asset, shares or property, then we can help you to claim these reliefs and to minimise your tax obligation. The Government values business and they do sometimes reward those who creates job and build value in the UK.
The Patent Box scheme
The Patent Box scheme is a way for businesses that hold patents (exclusive rights to their inventions) to pay less tax on the profits they make from those patented inventions. It offers a lower tax rate for the income generated from these patented products or technologies. This can encourage businesses to develop and commercialise new innovations, promoting research and development within a country.
Tax reliefs and allowances for businesses who have employees
Employment Allowance
Employment Allowance is a government initiative that provides financial support to businesses. It helps businesses by reducing their National Insurance contributions, which are taxes paid on employees’ wages. This allowance aims to lower labour costs for businesses, making it easier for them to hire and retain employees.
Apprenticeships
When a business hires apprentices, they can get a reduction in their tax bill, meaning they pay less in taxes. This encourages businesses to invest in training and education by hiring apprentices, which helps young people gain valuable skills and experience while boosting the workforce.
Hiring a veteran
When a business employs a military veteran, they can receive a tax break, meaning they pay less in taxes. This incentive is designed to recognise and reward businesses for hiring individuals who have served in the armed forces, supporting veterans’ transition to civilian employment.
Allowable tax expenses
Allowable tax expenses are costs that businesses can deduct from their income when calculating how much tax they owe. These expenses are related to the business’s operations and are considered legitimate and necessary. By subtracting allowable expenses from their income, businesses can lower their taxable profits and ultimately pay less in taxes.
This is just a sample
This is not the complete list of tax reliefs available, as there are so many it is difficult to list each and every one of them.
Tax reliefs really are dependent on the business, it’s set up and activity so to get a full review of what is available to you, get in touch.
Let's work together...
…and explore what you are eligible for to ensure you keep more of what you earn. There are probably some options that you are not aware of, the lesser known options could be the ones with the most impact for you.
