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What Tax Reliefs Are Available To My Business?

Posted 3 months ago

What Tax Reliefs Are Available To My Business?
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As businesses struggle to stay afloat during the pandemic, the prospect of paying business taxes is daunting. But it does not have to be like this. There are certain tax breaks available that enable business owners to save money which can then be reinvested. In this guide, we list some of the best tax reliefs available to you and your business.

R&D tax credits 

You may feel that your business would not qualify for this tax break, but is worth speaking with a tax credit expert. Broadly defined by HMRC, the scheme is wide-ranging and includes a business that are operating laboratories, software developers, architects and many other professions. If you are unsure about whether you will qualify, you can complete this useful test to find out.

Annual Investment Allowance (AIA)

Under this relief, you can claim 100% tax relief on any assets that are deemed as plant or machinery. The criteria is strict, so it is important to seek advice on whether your business will qualify. Examples of items that are not eligible include company cars or assets that you lease rather than own outright.

Seed Enterprise Investment Scheme

We greatly recommend you take advantage of the Seed Enterprise Investment Scheme (SEIS). This is a maximum investment of £150,000 targeted at helping start-up businesses to attract seed-funding. This scheme gives generous tax breaks to potential investors. The income and capital gains tax reliefs alone make this a tempting proposition for potential investors. Make sure you seek independent advice before investing under the scheme and refer to HMRC when looking at tax relief available under SEIS. 

Enhanced Capital Allowance (ECA) 

As part of its commitment to promote energy saving, the Coalition government introduced this scheme to encourage small businesses to purchase and use energy saving equipment. According to the current government website, if you use cars that have low CO2 emissions, water saving equipment and many other products, that save energy you can take advantage of this tax break. If you would like to find out more about ECA, visit the government’s website. 

Business Premises Renovation Allowance

This gives SMEs the potential to receive a 100 percent tax incentive on renovations they might carry out. To qualify, a building that is being used must have been empty for more than a year and used in a different capacity. This scheme is great for those businesses that plan to bring an abandoned warehouse or shop back to life. It cannot be used to refurbish an existing office space.

Employment Allowance

A business with employees can reduce the amount of national insurance it has to pay each year by claiming Employment Allowance. An employer claims the allowance each month via their firm payroll process, as NIC liabilities arise. No liabilities are payable until your company’s entire £3,000 allowances has been used up. It is not possible to claim the allowance if your company only has one employee/director.

For other funding opportunities available to your business, take a look at our grants page. 

Authors: Oliver Murphy & Sacha Bright


To the best of our knowledge, the information we have provided is correct at the time of publishing. Sacha Bright is not a solicitor or accountant and we recommend that you seek professional advice on any topic discussed.

Tagged: sme business funding

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