When the new tax year rolled around, it came with tax reliefs – some extending for an additional year (like the Retail, Hospitality and Leisure Business Rates Relief scheme) and some that have long been in place.
In this blog, we take a look at the main types of tax relief and whether your business will be eligible for them.
Business expenses
Many of your business’ running costs will be tax deductible. If they count as allowable expenses, then you can deduct these when you do your tax return. Allowable expenses include:
- Office stationery
- Heating and lighting
- Insurance and bank charges
In addition, if you provide benefits to employees (like a company car or childcare), then these can count as an allowable expense too.
Business rates
Businesses with a non-domestic property can benefit from discounts from the local council. Relief on business rates can be automatic, but in some cases may require an application. The process also depends on the location of the property (i.e. whether it’s in England or Wales).
Corporation Tax relief
Private limited companies can reduce the amount of Corporation Tax they pay when preparing their company accounts by deducting running costs (such as machinery and tools required for business activity). Corporation Tax can be further minimised via the Patent Box scheme. This allows those who’ve gained profit through patented inventions to apply the lower rate of Corporation Tax (10%).
VAT
VAT relief is relevant to businesses who are already registered for VAT. It enables reclaiming VAT on items purchased for a business as well as on business expenses. It’s important to note that if an item or expense has personal usage, then you can only claim for the business proportion.
Employment Allowance
Eligible employers can claim the Employment Allowance if their Class 1 National Insurance Contributions weren’t above £100,000 in the tax year specified or if they employ a care or support worker. It allows for a reduction in your yearly National Insurance liability – of up to £5,000.
Research and Development (R&D) tax credits
This tax relief is for organisations that have input into innovative projects, specifically in science or technology. R&D reliefs can be claimed on projects – even those that are unsuccessful – where research or development has contributed to advancing a subject field.
Gift Aid
If you make a qualifying donation to a charity, then tax relief can be claimed on this via Gift Aid. In the case that your business is a private limited company, then you’ll pay less in Corporation Tax for such donations.
Claim tax reliefs with Nabarro Poole
There’s a lot to get your head around with all the various reliefs (and taxes in general!), but Nabarro Poole are here to help.
We’ll work out all the ways you can reduce your tax bill, as well as support other areas of accounting where applicable – like budgeting and forecasting. Discover what we can do for your business by getting in touch with our team today.
Recent Comments