Many small business owners often fail to take advantage of five commonly overlooked tax breaks.

Maximize Your Tax Savings for Your New Business

Starting a new business is a thrilling endeavor, but navigating the world of taxes can be overwhelming. To help you save money and invest more in your new company, consider these five essential tax breaks:

1. Unlock R&D Tax Credits

Explore the potential of R&D tax credits, even if you think your business may not qualify. Professionals like software developers and architects have successfully claimed these credits, so it’s worth investigating further. Seeking advice from R&D tax credit experts such as Surrey accountants RJP LLP can provide valuable insights on potential savings.

2. Leverage Annual Investment Allowance (AIA)

Make use of the AIA to claim 100% tax relief on qualifying assets like machinery and plant in the first year of purchase. This can lead to significant tax savings, especially for businesses investing heavily in equipment. Additionally, capital allowances allow you to write off asset costs over time, reducing taxable profits and improving cash flow.

3. Take Advantage of Seed Investment Schemes

Consider the Seed Enterprise Investment Scheme (SEIS) and the Enterprise Investment Scheme (EIS) to attract potential investors and benefit from generous tax breaks. These schemes offer income and capital gains tax reliefs that can be appealing to investors, but ensure compliance with HMRC guidelines for successful funding.

4. Small Business Rate Relief

If your business property’s value is below £15,000 and you only use one property, you could qualify for small business rate relief. This relief can lead to significant savings on business rates, based on the property’s rateable value.

5. Reduce NICs with Employment Allowance

Claim the Employment Allowance to reduce your national insurance contributions (NICs) by up to £5,000 annually if you have employees. By claiming the allowance monthly through your payroll process, you can lower your NIC bill and potentially eliminate it entirely. Note that the allowance cannot be claimed if your company has only one employee/director.