Essential tax relief for smaller businesses
Businesses have to pay a number of different taxes, from Corporation Tax and Income Tax to VAT.
Without careful accounting, these tax liabilities can negatively impact your smaller business's bottom line.
The tax your business will need to pay depends on several factors, including how it is set up and whether or not you have employees.
Many smaller companies, however, can benefit from tax relief, depending on their business activities and circumstance.
For example, you may pay less tax or can claim rebates against activities such as money spent on research and development if your business specialises in innovation.
Other tax relief schemes, such as accounting for 100% of the cost of purchasing a new electric vehicle against company profits, can reduce the corporation tax your business needs to pay.
Reducing your tax liability can be a helpful way to ease financial pressure, and you can use the extra cash to help grow the business.
It can be a good idea to seek professional financial advice from an independent financial advisor or accountant to identify what tax breaks are available for your business.
Read our guide to managing business debt for further advice and guidance on cash flow.
What is a tax relief?
Also known as tax break, a tax relief is a way to reduce your tax liability and pay less tax.
Businesses can reduce their tax payments depending on the type of business, how they spend money, and the investments they make.
Tax relief may encourage particular business behaviours or investments, such as:
- donating to charity
- developing creative outputs and works
- investing in innovations and green technologies
- updating fleet vehicles to electric vehicles.
Tax relief may be industry-specific or dependant on business structure, such as operating as a social enterprise.
With all tax relief, your business may need to meet specific criteria before being granted the relief.
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Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.
Introducing Business Finance Week
From 6-10 November the British Business Bank, along with several partners from across the UK, will host Business Finance Week 2023.
With a whole host of nationwide and regional in-person events, webinars and more, Business Finance Week helps smaller businesses learn about the different finance options available to them to support their individual needs.