Finances are the most important factor in a business, and if not properly managed, the business will most likely fail. Despite this, many businesses fail to take advantage of tax incentives that are offered by the government. But there are five tax breaks that you can take advantage of to grow your business and make it a runaway success, especially in these challenging times.
Enhance Capital Allowance (ECA)
In 2001 the UK government introduced the enhanced capital allowance scheme in part to reduce the nation’s carbon output. The ECA allows business owners to claim 100 percent first-year tax relief on investments that are energy-efficient. This tax relief can help you reduce investment costs that greatly affect the environment. However, it should be noted that only energy-efficient and water-conserving machinery and plants qualify for the ECA scheme.
Research and Development
The government wants to invest 2.4 percent of GDP in research and development over the next decade. Small businesses that invest to research or develop innovations in their field could claim this tax relief even if they were unsuccessful. The average R&D tax credit small businesses can claim is £61,514. For your business to claim this tax relief, you must show how you tried to overcome uncertainty through science and technology and tried to find a solution that other professionals can apply in the field.
Uniforms can make a company appear more professional, make your brand more visible, and offer your staff protection. Some business owner s find it burdening for the business to invest in uniforms. You don’t have to worry; you can claim tax deductions for investing in staff uniforms, and employees can also claim a rebate for the cost of maintaining these uniforms. Whether the uniform is a full outfit or a T-shirt, it qualifies for this tax relief provided it has a permanent logo on it.
Register For VAT
Many people believe that a small business with a lower annual threshold turnover of £85000 cannot be VAT registered. This is, in fact, a misconception; any business can register for VAT. Having a VAT registration number comes with various advantages, the first being that it boosts your brand image to customers and suppliers. The other advantage is that when you charge VAT on products and services, you will reclaim those VAT charges later on. Another advantage is that if you register for VAT, you will pay less tax if your clients are businesses instead of individuals.
Attract Investors with EIS & SEIS
Millions of pounds are raised through the Seed Enterprise Investment Scheme (SEIS) for companies in the UK. The SEIS is a program that provides tax breaks to investors who finance projects for startups that may be viewed as too risky. This indirect tax relief will boost your business growth by offering tax incentives to investors who decide to back your business. If your business is based in the UK, has less than 25 employees, and has been operational for not less than two years or more than seven years, you might qualify for the Enterprise Investment Scheme.
Whether you are a business surviving or thriving in today’s economy, you can avail of these tax reliefs to help your business grow stronger and carry you through the next decade. Times may be tough, but there’s always a government plan that could give your business a hand.