Tax Breaks that Small Enterprise Should Take?

We’ve compiled a list of the various types of tax breaks available to small businesses in this post, along with information on eligibility and how to claim a deduction.

As a small business owner, you are required to hire a small business accountant who will help to pay a variety of taxes, depending on your activities and the performance of your business.

If you are subject to a tax, there is no way around it. You must pay the bill in full and on time — unless you have a valid reason to defer payment of your taxes.

However, there are ways to alleviate the burden of taxation and free up cash for your business by reducing the amount you must pay through a tax break.

1. Business expenses that are deductible

Regardless of size or industry, every small business has operating costs or money spent on keeping the business running and competitive.

Allowable business expenses are intended to assist you in managing some of these operating expenses by allowing you to deduct them from your taxable income or profits.

Among the expenses that are allowable are the following:

· Office expenses (including business premises costs). Items such as stationery, software, and printer ink, as well as rent, rates, power, and insurance costs, are typically used for less than two years.

· Costs associated with travel. Vehicle and travel expenses for business purposes, including fuel, hire charges, breakdown cover, insurance, transportation fares, and hotel stays.

· Clothing. Work uniforms and protective clothing are required.

· Staff. Salary, bonuses, pensions, benefits, training, subcontractor compensation, and agency fees.

· Financial expenses. Insurance premiums for professional indemnity and the hiring of accountants, solicitors, surveyors, and architects.

· Things you purchase in order to resell. Raw materials, inventory, and production costs.

· Public relations and marketing. Costs associated with a website, direct mail advertising, newspaper or directory advertising, and complimentary samples.

· Courses of instruction. Training, such as a certificate or refresher course, enables you to enhance your skills and knowledge for the benefit of your business.

2, Patent Boxes

As with R&D tax relief, the Patent Box scheme promotes innovation and provides a Corporation Tax break to forward-thinking businesses.

The scheme is designed to assist businesses in retaining and commercialising existing UK and European patents, as well as developing new patented products. Since 1 April 2013, if your business meets the criteria, you will be able to benefit from a reduced Corporation Tax rate of 10% on all profits earned from patented inventions.

And the discount is substantial. In 2016–17, 1,170 businesses claimed a total of £1,035 million in tax relief under the Patent Box scheme.

To qualify for this tax break, your business must meet the following criteria:

· To be taxed as a corporation

· Profit from patented inventions (these do not have to be your own).

For more information about taxation, feel free to contact cheap accountants in London any time