Here Are Some Easy Ways For SMEs To Save On Their UK Tax Bill
1. Employer’s Allowance
If you have even 1 employee you may be eligible for employer’s allowance. This means you can claim up to £5K back in NI a year. You can claim for this year as well as the prior 4 years. This could be £25K in total.
2. VAT Flat Rate Scheme
If you have a revenue of less than £150K you can apply for the VAT Flat Rate Scheme. You will be charged VAT at a reduced percentage based on your industry (down to 4% in some cases) but in return, you cannot claim VAT expenses. Your accountant should advise you which of these better suits your business.
3. R&D Tax Credits
The R&D Tax credit scheme is there to support businesses developing new technology or scientific understanding. You can get a tax credit up to 186% of the costs you spend developing your technology.
4. Annual Investment Allowance (AIA)
You can deduct 100% of your first £1 million investment into equipment for your business each year. Has your accountant discussed with you how to make the most of this? If you have profit on hand at year-end perhaps it is time to buy your team that new tech they wanted.
5. Salary/Dividend Split
You can deduct 100% of your first £1 million investment into equipment for your business each year. Has your accountant discussed with you how to make the most of this? If you have profit on hand at year-end perhaps it is time to buy your team that new tech they wanted.
6. The Patent Box Scheme
If you generate income related to a patent you own or hold the license to a patent, you may qualify for a tax rate of 10% in relation to this income. This could almost half your tax bill.
7. Check Your Personal Card
It happens to everyone, you bought something for the business, and you accidentally charged your personal bank card. This could be for travel, software fees or anything else. Always remember to charge that cost back to the business, as these do add up.