It's a challenging time to run your own business, and it's always worth exploring ways to ease the financial burden. While there are plenty of bills to pay when you run a small business, there may be a number of ways you can recoup some of the tax you pay.
1. Employment Allowance (National Insurance relief)
If you're an employer, you may be entitled to National Insurance relief of up to £4,000 (the total allowable relief for each business, not for each employee).
Claiming Employment Allowance lets you pay less employers’ Class 1 National Insurance every time you run your payroll until you reach the £4,000 threshold or the end of the tax year, whichever is sooner.
3. Business rates relief
Some business premises can get business rate discounts from local councils. There are different schemes available depending on your business.
For example, the small business rate relief is available if your property’s rateable value is less than £15,000 and your business only uses one property.
Another type of business rates relief is the enterprise zone, which could be useful if you’re relocating or just starting out. Working in an enterprise zone can give you up to £55,000 a year over five years in business rate relief. There are 48 enterprise zones across the UK.
4. Research and development tax relief
Claiming research and development (R&D) tax relief could be an option if you’re a limited company and work on innovative science and technology projects.
The project doesn't actually need to be successful to qualify you for the relief – it just needs to aim to research or develop and advance in your field.
There’s a specific part of the scheme for small businesses, SME R&D relief. This lets you:
- deduct an extra 130 per cent of your qualifying costs from your annual profit, as well as the normal 100 per cent deduction, to make a total 230 per cent deduction
- claim a tax credit if your company is making a loss, worth up to 14.5 per cent of the surrenderable loss
5. Creative industries tax relief
Creative industry tax relief is made up of the following eight Corporation Tax reliefs:
- Film Tax Relief
- Animation Tax Relief
- High-end Television Tax Relief
- Video Games Tax Relief
- Children’s Television Tax Relief
- Theatre Tax Relief
- Orchestra Tax Relief
- Museums and Galleries Exhibition Tax Relief
6. Seed Enterprise Investment Scheme
The Seed Enterprise Investment Scheme is a venture capital scheme that helps new companies raise money, as long as you use it for a ‘qualifying trade’. It gives investors tax reliefs when they buy new shares in your company.
7. Enterprise Investment Schemes
In some ways, the Enterprise Investment Scheme is similar to SEIS. The part to watch out for is the risk clause, which we've simplified in our simple guide to EIS funding. In it you'll also find more about the eligibility rules.
8. Marginal Relief
If you run your own limited company, you may be able to apply for Marginal Relief to reduce your Corporation Tax bill. It gives you a gradual increase in your tax rate between the small profits rate and the main rate.
9. Business Asset Disposal Relief (formerly Entrepreneurs' Relief)
You may be able to reduce your Capital Gains Tax bill when you sell your business by claiming Business Asset Disposal Relief (BADR).
10. The Patent Box
If you run your own company, the Patent Box may mean you can apply a lower rate of Corporation Tax to your profits on any patented inventions you have.
Self-employed tax deductible expenses
Whatever your business legal structure – sole trader, limited company, or partnership – it's important to make sure you're claiming everything you're entitled to on your Self Assessment tax return.