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Can your company reduce its tax bill?

Nobody likes paying taxes, but most business owners realise that it is important to do so. As a result, the majority of business owners work hard to keep good accounts and pay their tax bill on time.

Without a doubt, doing so is the right approach. It ensures that you do not end up being fined or prosecuted by the tax authorities and helps to secure the future of your company.

However, did you realise that you can potentially reduce your tax bill? If you do not you are not alone. The vast majority of companies are not aware of the various tax saving schemes that are available.

Below is a list of the main ways your company could potentially reduce its tax bill:

R&D tax credits

Some small companies can get a 225% tax relief on some or all of their research and development costs.

The Patent Box Scheme

Inventors and firms that patent products and sell them can potentially reduce the amount of Corporation Tax attached to profits earned from those patented inventions or innovations.

Business Rate Relief

This is one of the oldest of the tax breaks that is available, yet many firms are still not aware that they qualify to pay lower business rates.

Set up in an Enterprise Zone

There is more than 20 Enterprise Zones scattered across the UK. Firms that set up in these areas can potentially qualify for a range of schemes and incentives that can save them money on overheads, and sometimes tax.

Employment Allowance

If you normally pay less than £2,000 per annum in National Insurance contributions, your firm may qualify for this scheme.

Capital Allowances

Capital allowances allow those firms who qualify to write of some of the cost of their assets against taxable profits. Most firms do know about this scheme and do use it, but not all do.

Other schemes

Several government schemes are designed to make it easier for firms to raise funds. Some of these schemes work by offering tax relief to investors, which makes investing in your business a more attractive proposition.

How to take advantage of these schemes
The first step to taking advantage of these schemes and tax breaks is to be aware of them. A good accountant will make you aware of schemes they think your firm may qualify for as they become available. They will also be able to explain the ins and outs of any scheme and help you make an informed decision. Other sources of information include business forums, trade associations, chambers of commerce, your local council and other business owners.

Posted by Peter
September 12, 2015

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