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Tax reliefs


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By : Simon Gray

Are you aware of the tax relief incentives and schemes on offer? If not, here are some key tax breaks to consider to help grow your business and minimise your tax.

Annual Investment Allowance (AIA)

The Annual Investment Allowance allows businesses to deduct the value of items, of up to £200,000 from their profits before tax.

The items you can claim on include a wide range of plant and machinery worth up to the AIA total. Take a look here to find out what items count as plant and machinery.

Enhanced Capital Allowances (ECAs)

The Enhanced Capital Allowance is a scheme which encourages businesses to invest in energy saving plant and machinery. This can be claimed in addition to the annual investment allowance. The scheme lets businesses claim 100% first year tax relief on investment on qualifying assets. This means you can deduct the full cost of the qualifying asset against your taxable profits in the first year of purchase.

Qualifying plant and machinery criteria is published in the Energy Technology list.

Research and Development (R&D) tax reliefs

The R&D tax claim allows SMEs to claim back a total of 230% on their R&D expenditure. Even if your company is running at a loss you may still be entitled to R&D relief.

So, are you wondering whether you can submit a claim? Projects that qualify for R&D relief must be related to your company’s trade and includes a completely new development or the improvement of an existing one. The claim can even be made on unsuccessful projects.

To get R&D relief you need to be able to demonstrate the following:

·         You have looked for an advance in the field.

·         You have had to overcome uncertainty.

·         How you have tried to overcome the uncertainty.

·         An experienced professional in the field has not yet been able to offer a solution.

Find out more about qualifying for R&D relief here.

Employment Allowance

Aimed at helping businesses and charities to grow by reducing the cost of employment, Employment Allowance allows eligible employers to claim the allowance which in effect reduces their national insurance bill by up to £3,000 a year.

Once you have claimed the allowance, this allowance will continue every year without the need to claim each time.

Investment schemes

There are a number of investments schemes which aim to attract potential investors to fund growth as well as giving the opportunity for you to invest in other people’s businesses and benefit from tax breaks.

Seed Investment Scheme

If you looking for extra capital to start your new business, consider the Seed Investment Scheme (SEIS) which offers an alternative route to raise money by offering generous tax breaks to individual investors who buy new shares in your company.

Enterprise Investment Scheme

Not only does The Enterprise Investment Scheme (EIS) apply to start-ups is also helps SMEs. The scheme offers significant income and capital gains tax reliefs for potential investors.


With so many government tax relief schemes on offer, these are an effective and efficient way to minimise your tax liabilities and maximise on your profit.

Not sure if you are eligible? Contact me on simon@hentons.com

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