Don't Miss Out On Tax Breaks
We are in unprecedented times with the fallout from the Coronavirus. It's hitting business balances hard.
So, it's more important than ever to ensure you make the most of the tax breaks available before the end of the tax year or risk missing out on the opportunity to keep a bit more cash in your business.
Chris Salacinski, Financial Planner at Jarrovian Wealth, says: It can be difficult enough for small businesses trying to keep on top of the day-to-day job of trying to keep everything running, without having the worry of the virus crisis. And while tax can be daunting, business owners must ensure they don't miss out on important tax breaks, that could just give them the financial break they need right now.
Some of the breaks that business miss out on, mainly because they must make a claim to get them, include:
• Capital Allowances - on business assets such as equipment, machinery and business vehicles such as cars, van and lorries.
• Research and Development a Corporation Tax relief for firms creating advancement and knowledge and capability in science or technology. Available to businesses with fewer than 500 full-time employees and with revenues of less than 100million Euros or a balance sheet total of less than 86million Euros.
• Entrepreneurs Relief while it was slashed in the Chancellor's Budget earlier this month. For small businesses it will still save them money. Now when you sell a business you pay 10% on lifetime gains up to £1million, compared to the previous £10million limit.
• SEIS and EIS reliefs not actually a tax relief for your business but could help boost your finances. These are schemes set up by the Government to encourage people to invest in start-ups and new businesses. Investors in your company benefit by getting tax relief and capital gains tax reliefs. You can raise up to £5million each year and a maximum of £12million in a company's lifetime.
• Bad Debt Provision a reserve you set against debtors not paying up, an estimate for taking sales on credit. But you must take steps to try and recover the money to be eligible.
Also, remember to incorporate the Government Grants that have been made available to businesses following the outbreak of the Coronavirus including:
• A 12-month business rates holiday for all retail, hospitality and leisure businesses in England.
• A small business grant funding of £10,000 for all business in receipt of small business rate relief or rural rate relief.
• Grant funding of £25,000 for retail, hospitality and leisure businesses with property with a rateable value between £15,000 and £51,000.
• The Coronavirus Business Interruption Loan Scheme offering loans of up to £5 million for SMEs through the British Business Bank
Chris adds: Remember, if you don't use any allowances your business is entitled to before the end of the tax year, you will end up losing them.
About Jarrovian Wealth
JW was established in 2017. Our team of skilled and experienced financial planners does more than just look after the numbers for clients around pensions, investments and protection – both personal and business. We get to know and understand the deeper motivations and aspirations, so we can challenge people to think bigger. While knowing they are in a safe pair of hands building up a secure financial future. We may be one of the newer players, but we are packed with experience as our clients have been trusting our experts with their financial lives for over 30 years. We don't just focus on individuals we incubate businesses too helping entrepreneurs and those up and running to get ventures off the ground, stay on track and plan the perfect exit strategy, so owners can focus on the day job of running the show. JW's headquarters are in London.
For more information, please see:
PAUL SMITH ASSOCIATES
23rd March 2020