What are the Tax Breaks for Small Businesses in the UK?

tax breaks for small businesses

In the time of current era is quite challenging to carry out normal business activities because of the tough competition and to fulfil the demands of the customers and offer exactly what they require from your services or products. However, the financial burden for the small business is another struggle that gets along side by side. This makes every other businessman inclined towards ways of exploring some ease that can lessen their financial burdens. This increases the inclination of wondering about what are tax breaks for small businesses available in the UK.

Moreover, the fact of handling several business bills at the same time. Whether your business is flourishing or getting through the hard times. So it is always worth it to hunt on the idea that you can take along to recipe some of your tax bills in this regard. This can include tax reliefs for the VAT or the relief in business rates. This comprehensive guide is designed in a manner that will explain a number of popular ways to get a reduction in your tax bills. Let us get delved further into the discussion for gathering more relevant facts.


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Business Tax Breaks– Popular Ways to Lower Your Tax Bill

Just like any other businessman in the UK who is struggling with the financial burden, you can also be the individual who is seeking popular and applicable ways to lessen your tax bills. This will help to get the reduction in the tax bills in form of tax breaks as well.

Well, this is quite possible in several ways but you will have to be consciously aware of how to kick start and what is the most suitable way according to your business circumstances. Once you are in a position to get along with a certain kind of tax break, you are halfway there to get the benefits of tax breaks. In the following, we have compiled a number of tax breaks that can work for your kind of business situation.


1. National Insurance Relief (Employment Allowance)

When you are in the position of being an employer, you will be eligible to get National Insurance relief for a certain limit in the UK. There is a certain amount set for the whole business as tax relief and not for the employees in particular. If you claim this kind of employment tax relief, you will have to pay less in the form of class 1 national insurance.


2. Annual Investment Allowance

As a small business, you can even avail yourself of tax relief in the form of an annual investment allowance. This will allow you to be in a position where you are capable of deducting the cost of your business machinery and the cost of your plant before you pay the taxes.

You will have to be mindful about using the cash basis accounting to get the process completed in an errorless manner. Also, be mindful are about when you can claim the capital allowances according to the suitably of your business situation. Moreover, you will also have to check the eligibility criteria before making the claim of getting the allowance.


3. Business Rates Relief

This is applicable for limited business types that there are allowed to get reduced business rates in the form of relief from the local councils. In this regard, you will have to hunt for the most suitable business scheme that can work for your business as there are several schemes in this regard available for small businesses.

The property business is one of the examples where reduced business tax relief is available very easily and on easy terms and conditions as well. Enterprise one is also a kind of business rate relief. All you will have to do is to get the right and suitable business rate relief for your needs.


4. Research and Development Tax Relief

Research and development tax relief is also known as R&D relief in the business community. This is the most suitable option if you are carrying out your business activities through a limited company.

Also, with the work that is being done for the development and research of innovative science and technology projects, this kind of tax relief will be most appropriate and relevant to be availed for the projects. You will have to check the eligibility criteria before you opt to get tax relief for your business model or project research.


5. Creative Industries Tax Relief

Galleries Exhibition Tax Relief, Orchestra Tax Relief, Theatre Tax Relief, Children’s Television Tax Relief, Video Games Tax Relief, High-end Television Tax Relief, Animation Tax Relief, and Film Tax Relief are popular examples of creative industries. So the corporation tax relief in the UK normally belongs to the earlier-mentioned creative industries only.

However, according to the tax rules, the industry will be considered eligible to get tax relief only if the company is taking responsibility throughout development. This involves the whole process from the start to the completion of a particular project.


6. Seed Enterprise Investment Scheme

The seed enterprise investment scheme is generally designed for new ventures in the business world that will get help in form of the capital to get their journey started towards development. However, this will be only applicable to your business model if it belongs to a trade that is qualifying for this kind of tax break.


The Bottom Line

Now that you have gathered a fair amount of information regarding what are the tax breaks for small businesses in the UK, we can bring the discussion towards wrapping up. The tax break is indeed a great way to lessen the financial burden of a business venture whether it is new or established. However, before you plan to opt for any one of the tax breaks for our business, you will have to check the eligibility criteria according to the specific needs and suitability of your business. We hope these few minutes of reading will help you to develop a better understanding of how to get the maximum benefits of the tax breaks for your small business if you are carrying it out in the UK.


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Disclaimer: All the information provided in this article on tax breaks for small businesses in the UK, including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.