HM Revenue and Customs (HMRC) recently reported a record-breaking increase in Corporation Tax receipts for the 2022/23 tax year.

The total amount collected rose by £17.3 billion, reaching an unprecedented £84.7 billion.

While this is good news for the Government’s coffers, it may raise business owners’ concerns about their tax liabilities.

However, various tax reliefs and VAT reclaims available to businesses can help mitigate these costs.

Tax reliefs available to businesses

Research and Development (R&D) tax credits

Businesses investing in innovation can claim R&D tax credits. These credits can either reduce your Corporation Tax bill or provide a cash sum for some small or medium-sized enterprises (SMEs).

Capital allowances

Capital allowances enable businesses to deduct the cost of certain capital assets from their taxable profits. These can include machinery, business vehicles, and even fixtures in buildings.

Enterprise Investment Scheme (EIS)

The EIS encourages investment in small, high-risk companies by offering tax reliefs to investors. While this is aimed at investors, it benefits businesses by making them more attractive investment options.

Seed Enterprise Investment Scheme (SEIS)

Similar to EIS but aimed at very early-stage companies, SEIS offers both Income Tax and Capital Gains Tax (CGT) reliefs to investors, thereby encouraging investment in start-ups.

VAT reclaims

Input VAT

Businesses can reclaim VAT paid on goods and services purchased for business use. However, there are certain conditions and exceptions, such as for entertainment expenses.

VAT refunds for business visitors from outside the UK

If you are a business visitor from outside the UK, you may be eligible for a VAT refund on goods and services purchased during your stay.

Flat Rate Scheme

Smaller businesses may benefit from the Flat Rate Scheme, simplifying the VAT process and potentially saving money.

While the record amount of Corporation Tax paid may seem daunting, various tax reliefs and VAT reclaims are available to business owners to alleviate some of this financial burden.

By taking advantage of these schemes, businesses can not only reduce their tax liability but also encourage investment and growth.

If you would like more advice about the tax reliefs your business can claim, please contact us.

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