Could Your Business Be Claiming More Tax Relief?

| 24-07-2018

Running a business, whether you're a small business owner or in charge of a large scale enterprise corporation is all about watching every penny and making sure you’re spending wisely. But does your business benefit from all the opportunities for tax relief it could do? The government offers lots of tax deductions and incentives for businesses of all sizes, not just small companies, new businesses, multi-nationals or big corporate entities. You could find that many of the tax relief incentives are on activities you consider to be day-to-day in your business. Here are a few of the more common ones below. Are you missing out on any of them? If you think you are – or would like to see if there are other incentives you could be using – an accountant or tax adviser is a good place to start.

Research and development – it’s not just about lab coats and test tubes

Does your business research or develop new processes, products or services in science and technology or improve on existing ones? Or are you planning to set up a business based on the results of research and development in a particular area? If so, you may be able to claim sizeable tax relief on the work via small business and medium-sized enterprises (SME) R&D tax credits and relief. You can deduct an extra 130% of your qualifying costs from your yearly taxable profit, as well as the normal 100% deduction, to make an overall 230% deduction. You can also claim a tax credit if your company is loss making, worth up to 14.5% of the surrenderable loss. To find out more and view current business tax rates, visit the HMRC & Gov UK site at - www.gov.uk/guidance/corporation-tax-research-and-development-tax-relief-for-small-and-medium-sized-enterprises.

Annual Investment Allowance – relief on the plant and machinery you purchase

You can claim 100% tax relief on qualifying plant and machinery in the year you purchase them. You can also claim on alterations (but not repairs) and the cost of demolition of plant and machinery. The Annual Investment Allowance is £200,000 in each calendar year but the rules around it are quite strict, so talk to your accountant or tax adviser to make sure any claims you make are legitimate. Find out more at www.gov.uk/capital-allowances/annual-investment-allowance.

Enhanced Capital Allowances – tax relief on green equipment

The government wants to encourage businesses to invest in high-performance energy efficient equipment. It does this via the Energy Technology List (ETL) and Enhanced Capital Allowances (ECA). Products on the ETL deliver an objectively high standard of energy efficiency (which is defined as performing within the top 25% of all similar equipment available in the UK market). The ECA allows you to claim 100% capital allowance on any product on the list in the year you purchase it. For full details see www.gov.uk/government/publications/enhanced-capital-allowance-scheme-for-energy-saving-technologies.

Employment Allowance – reduce your National Insurance contributions

If you have employees, you can use the Employment Allowance to reduce the amount of National Insurance you pay each year by up to £3,000. The allowance reduces your employers’ (secondary) Class 1 National Insurance each time you run your payroll until the £3,000 has gone or the tax year ends (whichever is sooner). In some cases, this could mean you don’t need to pay any National Insurance at all. For details see www.gov.uk/claim-employment-allowance.

Tax relief starts at home

As well as looking for tax relief, tax credit options, capital gains tax allowances and incentives the UK government offers, you should also aim to do everything you can at your end too to receive various tax breaks. For example, many business owners miss out on income tax relief on various business expenses and taxable income simply because their processes aren’t transparent enough to make it easy to do. Concur automation solutions can help give you the transparency you need. Plus Concur Audit Services can carefully review business assets and tax claims, making it easier for you to monitor tax policy compliance, secure preferred business rates for suppliers and, crucially – reclaim tax. Find out more in this eBook, Take Control with Concur Audit Services.