Claim a Tax Deduction or a Cash Sum if you are Developing Products, Processes or Services

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tax refundThe government acknowledge that innovation is key in making the UK a desirable place to invest, settle and create and are emphasising this desire with attractive tax rebates to encourage innovation within the UK.

The rebates on offer have improved in recent years especially the research and development rebates for companies of all sizes. The most attractive rebates are available to small companies which are defined as those with less than 500 employees and €100 million turnover (so not so small).

If you are a small company that is registered for corporation tax and undertaking work to improve products or services you sell; or the processes by way these products and services are delivered. You should be eligible to receive a tax saving of 45 pence for every £1 spent on research and development or a cash equivalent of 33 pence for every £1 spent for loss making companies.

If this is something you would like to explore call Webworks on 020 8144 4474.

Business Owners Should Claim all Their Tax Allowances

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tax refundWhen many business owners start out they are working flat out to make sure their business survives.

This is often what is needed and necessary. The problem is that the business owner can get caught in tunnel vision of the daily tasks needed to survive whereas taking some time to work on the business rather than in the business (especially if that discussion takes place with a trusted business advisor) can reap greater rewards. And these rewards can help to pay for some breathing space or guidance on how to improve productivity. Take a football analogy, watching inexperienced players kicking the ball toward goal only to lose it and have to run back in defence, whereas the person that puts his foot on the ball, looks up and threads a single pass to players running on goal is far more likely to score.

The standard single persons income tax allowance for the current tax year is £10,600. This is the amount of money you received tax free. You will need to register with the HMRC but the time spent will be well worth it. Could you partner help in the business? If there are jobs to do these could be completed by your partner if they do not use their income tax personal allowance elsewhere. The money returns to the household while paying less tax.

The Annual Investment Allowance is a scheme that lets businesses put the full cost of certain assets against their profits before calculating tax in the year of purchase drastically improving cashflow. Currently the scheme has a limit of £500,000 however that is due to be reduced to £25,000 on 1st January 2016. If you company is paying corporation tax and you are considering capital expenditure it would prove advantageous to buy these assets before the reduction so that the tax saving is made as early as possible.

Finally there are few business assets when used for personal use that do not attract a tax charge. Mobile phones are one of them. If you are using mobiles in a business make sure that they are assets of the company and the personal calls go free.