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Four tax breaks your Birkenhead accountant can advise you about

There is nothing wrong with taking advantage of legal small business tax breaks, as these can be a very effective way of keeping outgoings to a minimum or attracting investment.

However, although Birkenhead is business-oriented and boasts facilities like the Birkenhead Business Improvement District, many firms based there overlook tax breaks that can be beneficial. Your Birkenhead accountant will be able to offer detailed advice about which tax breaks will suit your company. These might include:

1. Research and Development (R&D) tax relief

This could be suitable if you have a tech business, as R&D tax relief is designed for small firms that are developing innovative technological or scientific projects. To qualify, you have to show that your company is working on something marking an advance in one of these areas, but theoretical ones such as maths and social sciences do not count.

It can be worth speaking to an accountant about R&D tax relief, as a range of SMEs in fields as divergent as architecture and software development have been able to claim it.

2. Enterprise Investment Scheme

The Enterprise Investment Scheme (EIS) was created to help small firms secure investment by providing those who purchase shares in them with tax breaks. EIS allows a company to raise a maximum of £5m investment per year and it is a tax scheme for which all types of small business can apply.

It can make investing in your company much more attractive by providing financers with both capital gains and income tax breaks, but it is wise to get approval from HMRC to ensure you are not breaking any tax laws.

3. Annual Investment Allowance

If your firm owns equipment that is classed as a company asset, the Annual Investment Allowance will enable you to claim tax relief of 100% on it for the first year after you bought it.

Not all equipment used by a small business will qualify for this however, as a company car is one example that does not, but your accountant will clarify this for you.

4. Employment Allowance

This can be a big saving if your business employs other people. Applying for this allowance can potentially save your company a maximum of £3,000 in National Insurance (NI) payments each year by letting you claim for NI liabilities through your firm’s payroll.

Depending on how many you employ and the size of your firm’s NI bill, it may cut out this cost altogether.

Posted by Peter
July 10, 2019

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