Dealing with taxes is an obligation, as any business owner will tell you. In the UK, you are expected to file your tax returns correctly – and, of course, on time – so you don’t have to suffer the consequences of late fees and other charges from the government.
But when dealing with taxes, did you know that you have a variety of tax breaks which you can take advantage of as well? Knowing what these tax breaks are can spare you from additional expenses and perhaps even help you make better investments for your enterprise. So what are these all-important tax breaks you should know about? Let’s find out.
1. Tax breaks on research and development (R&D)
There is an often mistaken conception that only big, multinational corporations and other big players can benefit from research and development tax credits. Additionally, there is another mistaken idea that only those businesses involved in laboratory or scientific work (such as pharmaceuticals) can take advantage of tax credits on R&D work that they undertake. Both of these beliefs are wrong, as even small business enterprises and those who do not deal with laboratory or scientific work can benefit from tax credits on R&D. As a matter of fact, many architects, software programmers and developers, and other professionals have already made use of the UK government’s tax relief and credits on R&D. Perhaps you can, too – it’s worth finding out.
2. Tax breaks on assets
Whilst you may think that you don’t have any assets to speak of which can entitle you to a tax break, you should think again. Some experts say that you should take advantage of your AIA, or Annual Investment Allowance, to claim tax relief of up to a hundred percent for any of your assets which can be categorised as plant and machinery. Although the criteria for determining which assets qualify are quite stringent, it’s still good to check. Whilst company vehicles are not eligible, you may own other assets which can help you profit from a tax break. If you’re not sure about your assets’ eligibility, you can always consult qualified accountants such as the accountants in central London from GSM & Co.
3. The SIS and EIS
Whilst this is not a tax break for you per se, there are two schemes that you may want to check out as well: the SIS, or Seed Investment Scheme, and the EIS, or the Enterprise Investment Scheme. The SIS is for business start-ups looking for extra capital from prospective investors, while the EIS is for any small- to medium-sized enterprise seeking extra funds. Prospective investors tend to be attracted to these schemes because it helps them get tax relief – in the end; it’s a win-win situation for everyone.
4. The ECA
The ECA stands for Enhanced Capital Allowance, and this is where you can receive tax relief as an enterprise if you make use of energy-saving or energy-efficient appliances, products, and equipment. Although there are some questions regarding the specifics of this allowance, you may be able to benefit from it if you use a vehicle that has low emissions of CO2, for example, or if you use renewable technologies.
5. Tax breaks on building renovation
Another kind of tax break you may be able to make use of is the tax break on renovating a dilapidated structure or building. Basically, you can get a tax break if you are planning to renovate a structure or building which has been unoccupied for over one year – think of a shop or warehouse which has been abandoned, for instance. Any refurbishment or renovations carried out in the structure may bring you a tax incentive of up to a hundred percent.
