Even with a little glowing light at the end of this unimaginably long tunnel, businesses are managing to find their way through during these difficult times, but we’re not here to spread doom and gloom. We want to bring hope and open your eyes to options that until now you might not have considered for your business.
More options than you realise.
You’re probably feeling like you’ve exhausted all of the support, funding and loans available to you. However, as Accountants and Advisors, we have a duty to ensure our clients leave no stone unturned in these remarkable conditions we find ourselves in and there are ways, many ways.
As expected, we have seen the government extend initiatives, pumping more money into the pot. Money to give businesses and individuals the necessary support to try and survive, but government support and loans are not the only options for businesses right now.
We highlighted it before but still, tax advice seems to be getting missed out of the opportunities.
Now is the time to consider tax reliefs and advice for your business and there’s a lot to consider – see the image and summary below:
If your business has spent money on projects to develop new or existing products/services, or processes to overcome technological challenges, you may be able to claim back £33 for every £100 spent via R&D Tax Relief and it doesn’t matter if your business is profitable or loss making!
If your business has previously made an R&D Tax Relief claim, our experts can review it again to ensure the claim was maximised. There may be additional project costs you could claim for. If you have built up losses from R&D you may be able to switch the way you previously took the benefit and claim a tax free, cash payment.
If you are a loss-making business, you may be able to shorten your year-end so you can make an R&D claim sooner and accelerate your tax free, cash payment. For more info visit here.
If your business has been directly involved in the production and development of films, high end TV, animation TV, video games, theatrical productions, orchestral concerts and/or museum/gallery exhibitions, you may be able to claim back £45 for every £100 spent via Creative Tax Relief and it doesn’t matter if your business is profit or loss making.
If your business has previously made a Creative Tax Relief claim, it should be reviewed again (our experts can do this as well) to ensure the claim was maximised. There may be additional project costs you could claim for.
If your loss-making business has made Creative Tax Relief claims in the past, you may be able to get up to 70% of your current year claim early (in advance of final submission) to improve your short term cashflow position.
Again you can shorten your year end to accelerate your Creative Tax Relief claim and have access to your tax free, cash payment. For more info visit here.
If you own patents that are making your business a profit, you may be able to make a Patent Box Tax Relief claim that could reduce your business corporation tax.
If you own profitable, unpatented intellectual property which you could patent, you could consider applying for a patent as you could have access to the Patent Box Tax Relief. For More info visit here.
The government have already announced a longer repayment period for “Bounce-back” and CBIL loans. From 6 April 2021, a new Recovery Loan Scheme will provide lenders with a guarantee of 80% on eligible loans between £25,000 and £10 million to give them confidence in continuing to provide finance to UK businesses. The scheme will be open to all businesses, including those who have already received support under the existing COVID-19 guaranteed loan schemes. For more info visit here.
To encourage companies to invest in new capital equipment the chancellor announced a radical new “super-deduction” of 130% where they invest in new plant. This would mean that when a company buys plant costing £10,000 they would qualify for a £13,000 deduction in arriving at business profits. The new deduction, which will run for two years from 1 April 2021, will not be available for motor cars. Certain assets such as fixtures in buildings will only qualify for 50% relief in the first year instead of the normal 6% writing down allowance. For more info visit here.
If your business has previously bought an asset (historic acquisition) within a building, you may be able to claim for Capital Allowances Tax relief for the asset, and make a business corporation tax saving. If this claim has already been made, it should be reviewed to ensure the relief has been fully maximised.
If improvements have been made to a building such as a new life, you might be able to claim further costs relating to the improvement. If the business has recently purchased an asset you may be able to make a tax relief claim and reduce your Business Corporation Tax Bill
If your business has sold an asset in the last 3 years and plans to reinvest the funds into a new business, you may be able to claim tax relief on the tax previously paid.
If your business plans to buy a residential property in England or Northern Ireland it may be beneficial to do so before 31st March 2021, to take advantage of reduced Stamp Duty Land Tax (SDLT) rates. The same applies for Scotland how it will be the reduced Land and Buildings Transaction Tax (LBTT)
VAT planning reviews your business processes and systems to identify ways to improve your cash position by ensuring VAT is recovered quicker plus many other areas such as VAT recovery position including partial exemption, accounting schemes or specific issues.
Voluntary registration, if your business has supplier costs greater than revenue, it could be very beneficial to register for VAT which may improve your cashflow.
If there is a risk of your business will close in the next 3 years, advice should be sought to make sure the business structure is as tax efficient as possible.
If you are currently a loss-making business, you may be able to carry back losses to previous years or shorten your year end to improve your cashflow.
If a business has stopped trading it may be able to carry back losses made in the last 12 months - up to 3 years to reclaim corporation tax previously paid.
Securing future trading status and having access to favourable tax reliefs in the future, a business must remain trading or show their intention to trade despite the current restrictions placed on businesses.
Enterprise Management Incentives (EMIs) - if your business has an EMI share scheme, employees can still receive their shares and be given even more shares via the scheme despite being on furlough, part time or unpaid leave.
To boost cashflow, certain businesses can obtain funding from private investors which would in turn give the investor favourable tax relief of up to 50% of their investment.
Tax is a very real cost to businesses. To fail to reduce it is to miss out on money that should be working for you, in your business. Having an awareness of the tax consequences of grants and loans when using them is vital. You don’t want to walk into unexpected tax charges, but with the right advice, you can identify major cash injections.
If you’re a business owner reading this, valuable tax savings could help counteract some of the damage you and your business are feeling right now. There are essential and popular advisory opportunities that can get money back in a relatively short time frame with HMRC.
And tax savings don’t need to be paid back. No debt hanging over your head. Just money back into your business. Take R&D Tax Relief as an example, you could claim up to 33% of the costs incurred on activities that are considered eligible. This money can be used for absolutely anything.
If any of this seems it could be possible for your business, let's talk. If you need some more time, there's a free e-book below which covers the content covered.
We can help get you through this. Don't miss out on any opportunity for getting money back into your business when you've come this far.
This article was written for Saint Financial Group, a multidisciplinary group based in the UK that helps small businesses develop and grow. SaintFG offers a range of quality solutions in supporting businesses.
Saint provides the luxury of free business consultancy for of our clients, call now for your free consultation with a friendly business advisor to discuss your burning questions and put that energy back into your business!
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