4 UK Tax Incentives Every Small Business Owner can Benefit from

Posted by D&V Accounting Services
May 04, 2015
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Small Business Accounting Pain Points Your Firm Can Help With

Tax compliance in the UK, although crucial in effective and efficient overall business management, is typically neglected. However, to ensure that your business operations continue to run seamlessly, your business needs a comprehensive and actionable SME tax planning strategy that allows you to stay on top of your finances and in compliance with UK’s tax laws.


With SMEs representing over 99% of the private business sector in UK and the government’s recognition of their contribution to the British economy, they enjoy a wider range of benefits care of the government. Some of these benefits are the tax incentives and breaks that support all small and medium-sized businesses. Make sure that your business is not missing out on the most basic schemes and incentives applicable to it:

Business Investment Capital

Your business can enjoy tax incentives from the government’s Seed Enterprise Investment Scheme (SEIS), which offers tax relief to investors in higher-risk small businesses. SEIS provides 50%-78% tax relief and a deferral of any Capital Gains Tax - an effective incentive for your possible investors and partners.

Employment Allowance

Small businesses with 250 or fewer staff members are eligible for National Insurance Contribution (NIC) reductions. The HMRC has started to utilise a systematic payroll software that allows you to claim your allowance by simply clicking a button on your payroll software provider.

The government also offers incentives worth up to £2,275 for businesses that employ 18-24 year olds. Aside from that, there is also a grant of up to £1,500 for businesses that hire up to a maximum of 10 apprentices for the first time.

Rates Relief

The Small Business Rates Relief provides a 100% rates relief for businesses that own properties at a rateable value of £6,000 or less. The relief rate then gradually declines to 0% when the rateable value is £12,000 or more.

Research & Development Tax Credits

The British industry’s drive to spearhead innovation has given them the idea to provide incentives to businesses that invest in research and development. R&D relief covers expenses incurred in projects and research pertaining to technology and/or science. Oftentimes, costs of projects that are aimed at making things and people more efficient and more environment-friendly--without the unnecessary expenses--are also covered.

These are just some of the most basic tax incentives and breaks that the government provides for SMEs. To ensure that your business remains fully compliant with UK tax laws while remaining eligible for the benefits offered by the government, take these incentives into consideration when developing SME tax planning and management strategies.

Learn how you can effectively and efficiently run your business without setting aside your business financial management with D&V Philippines’ assistance and advice. Get in touch with us to discuss all your finance and accounting concerns and queries.

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