Tax Incentives Available for Small Businesses

by Kristen White Blogger Being informed on taxation policies, incentives, and breaks that apply to your business can help you save on money that you would have lost. One of the ways this can happen is increased cash flow from tax relief. Small and medium enterprise business owners mostly miss out on such opportunities because they do not understand the rules. This information is available from experts when you find accounting businesses near me.
Below are some of the common tax incentives available for small and medium business owners according to bookkeeping and accounting in London experts.
 
Register for VAT
Registering for VAT pays, irrespective of your level of revenue. Well, this might not look like it can be beneficial in any way. Most people would think that not registering will help them save the cash that they would remit to the tax authority.
But look at it this way, registering for VAT will boost your cash flow and allow you to add 20 percent to your payables. This will increase your income in the short term period. The other benefit of registering for VAT is that it can open for you more opportunities. There are organizations, for example, that will only contract suppliers who have registered for VAT.
 
Tax-deductible Annual Events
The taxman can, at times, put on the hat of a charitable person, for example, during end year parties where limited companies are rewarded. For most small companies, this is usually their only event of the year. The money spent per head is considered a tax-deductible benefit. This incentive has a limit, and some business owners prefer subdividing this when they need to have more than one party in the year. There are a few conditions that need to be fulfilled to benefit from this incentive. First, the party must be inclusive of all the employees and not just a select few. Then, the cash is not an allowance but a hard limit, meaning if you spend more than that, then you lose the entire benefit.
 
Research and Development Reward
Most business owners might not be aware that there is a tax incentive for organizations that invest in research and development to improve the technology. The incentive comes in the form of corporation tax relief, and it is applicable even when the research and development project was not successful. There are definitely some conditions that need to be met, but organizations that invest heavily in innovation can explore this benefit.
 
Clothing Claim
If you provide your employees with work clothes or protective gear, you are exempted from tax on the cost of buying the outfits and national insurance. Your employees will also benefit from this relief, and it is essential you make them aware of this so that they can save some cash. Most people are not aware of the tax rebates available to them if they repair, maintain and clean their work uniform.

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Created on Nov 14th 2019 23:52. Viewed 310 times.

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