What are all the different tax reliefs?
We are often asked about what all the different tax reliefs are and what can be claimed and what can’t be claimed. Below is our brief overview of some of what’s out there and who can claim:
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Capital Allowances
These are tax relief on the purchase of capital equipment by a business up to 100% of the cost of the asset. They can vary from year to year depending on what HMRC are trying to encourage at the time. For example, currently you will get more relief for an electric car than a ‘gas guzzler’ which the Government is trying to discourage.
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Entrepreneurs’ Relief
When disposing of all or part of your business you may be able to pay less capital gains tax by qualifying for the 10% rather than the standard 28% rate. Certain criteria have to be met and it is not available in all situations.
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Corporate loss relief
In certain situations, companies who have made losses in the past can carry forward these to reduce the taxable profit in the current year, thereby reducing their tax charge.
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Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS)
These two schemes give tax relief to investors who invest in small or start up businesses under certain conditions. As the amount they stand to lose is off set my tax relief, it can make investment in the company more attractive and less risky for investors.
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Research and Development Tax Credits
If you are a company and undertake research and development activities then you may be able to claim tax credits in respect of what you have paid out. In pre-revenue phases this can mean a cash refund from HMRC, and once trading, a nice reduction in your corporation tax bill.
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Enterprise Management Incentive (EMI) scheme
In order to help firms to maintain key staff and incentivise them, share options can be given by the employer. The EMI scheme gives the employees relief on their personal income tax.
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Patent Box Relief
If your company develops patented products and meets the set criteria, you could pay a lower rate of corporation tax on the profits generated from them.
If you in doubt about whether or not you can claim a relief, or what you entitled to, speak to your accountant.