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Businesses of all sizes sometimes miss out on tax relief and breaks that can save them a significant amount of money, simply because they don’t realise that they can do it. Indeed, whether you are running a start-up or a large, growing business, it is vital that you make the most of the tax system, and take advantage of any benefits you are owed.
The fact is that the government offers tax breaks because it wants businesses to invest in new ideas, problem solving activities, and to generally benefit the country. So, if you can get tax relief for something that you already doing then it is definitely worth it. Here we take a look at five ways that you can get tax relief that you might not know about. You can use these to save your organisation money.
1. Working with experienced accountants
One of the most important things to note here is that every business is different, and it can be hugely beneficial to work with accountants with experience in your specific industry. Often getting tax relief involves fulfilling specific criteria, and skilled business accountants can provide you with details on what your company needs to be doing to achieve this.
“Business accountants help you keep your financial records in order and support you to make crucial business decisions that count.” - Numeric Accounting
When you are choosing your account make sure that you select one that has years of experience, and crucially is local to your organisation. It is business accounts who have worked with a large number of business in your industry and area who will be able to provide you with the most relevant information about tax relief for your business.
Don’t simply assume that you are definitely eligible for tax relief, as some types have complex rules regarding eligibility.
2. Innovate for R&D tax credits
Many businesses do not realise that it is perfectly possible for them to get R&D tax credits – they are available to many businesses across the UK, and actually apply to an extremely broad spectrum of science and technology. What many businesses don’t know about R&D tax credits, is that they can be claimed not only against successful projects, but also those that ultimately don’t work; simply trying to solve a problem or advance knowledge is enough.
To get R&D tax credits you will need to have a project that will: look for an advance in science or technology, attempts to overcome some sort of uncertainty, and attempted a solution that couldn’t be easily worked out by others in the field.
3. VAT registration
It is well known that businesses turning over in excess of £85,000 need to be VAT registered. However, you might not realise that a smaller business with a turnover that is lower than this threshold can also register for VAT.
There are some levels of compensation for those businesses that are VAT registered. For example, you can backdate VAT reclaims for up to four year. This can give you a useful lump sum which can be invested. Additionally, it can have the advantage of improving your reputation with suppliers and customers.
4. Raise money with SEIS
You might be looking to grow your business but are having trouble raising the money to fund your next steps. However, this can be achieved more easily with help from the government’s Seed Enterprise Investment Scheme (SEIS). If your business has been trading for less than two years and owns less than £200,000 in assets, you can apply for the scheme.
The scheme offers tax incentives to investors who buy shares in your company, which can make your business a far more attractive investment opportunity.
Here is another surprising way that your business can get tax relief – by having a party! Any limited company can claim tax relief on the cost of hosting an office party, making it more cost effective to treat employees. This benefit actually even extends to a plus-one for each employee. To receive this tax relief, the party needs to meet the conditions that the cost does not exceed £150 per head, that the event is for entertaining staff, and that all employees are invited.
The cost is an annual limit, rather than a threshold – that means that if the cost of the party exceeds £150 even by £1, the whole of the party will be taxed.