6 Must Know Tax Breaks For SMEs in 2015

01/05/2015

Managing Your Money

While thousands of businesses are taking advantage of the tax breaks that could benefit their business, a third are still unaware of the breaks available to them. To ensure you’re not missing out we’ve had a look at some of the schemes you could be entitled to...

1. Research and Development Tax Credits (R&D)

The Research and Development (R&D) tax credits available to SMEs have been substantially increased over recent years with the allowance having risen yet again this year to 230%. Whilst the number of SMEs claiming these credits has increased, it is still relatively low. A recent KPMG Enterprise survey of SMEs found only 5% had ever claimed R&D tax relief.

This surprisingly low figure is partially due to firms being unaware of what they could claim relief on. If your company is innovating or improving a product or service, chances are you’re eligible. SMEs can often claim on a host of things including: staff costs, material costs and utility expenses.

2. Seed Enterprise Investment Scheme (SEIS)

If a start-up or early stage SME is looking to raise funds, but has decided not to borrow through a bank or another lender, then they could seek out an external investor. The Seed Enterprise Investment Scheme (SEIS) was launched in 2010 to encourage investment in SMEs. It gives investors tax breaks of up to 50% and business owners an alternative source of revenue.

3. Enterprise Investment Scheme (EIS)

The Enterprise Investment Scheme (EIS) is designed, like the Seed Enterprise scheme, to encourage investment in higher risk SMEs. Investors are tempted by income tax and capital gains tax reliefs.

4. Employment and National Insurance (NI)

The current Government has vowed to slash National Insurance (NI) costs with companies eligible for a £2,000 Employment Allowance to reduce their NI bill: an estimated 1.25 million SMEs will benefit from this. Small grants are also available to employ an apprentice under the apprenticeship grant for employers. This is available to businesses with fewer than 50 members of staff that hire 16-24 year olds.

5. Property and Machinery Perks

If you’re looking to bring a building back into business use that’s been vacant for at least a year, then you’re entitled to financial help. The business premises renovation allowance offers SMEs a 100% allowance on building works. Qualifying properties must be in a disadvantaged area and the break is only open until 2017.

Capital allowances are also available for SMEs that use machinery. You can check which items are eligible on the HMRC website. There’s also the Enhanced Capital Allowance (ECA) scheme which provides SMEs with enhanced tax relief for investment in energy saving equipment. You can find more details on this here.

6. Small Business Rates Relief Scheme

The Small Business Rates Relief Scheme allows SMEs with a single property and a rateable value up to £6,000 to claim back 100% relief. Those with a rateable value between £6,000 and £12,000 can also benefit, with a tapering relief. Businesses with a rateable value up to £50,000 can get a discount of £1,500.

There are also local and industry specific grants that SME owners should be aware of, you can find out about these by contacting your local authority.

Running a business leaves you with little time, but researching some tax breaks that could save you money is time well spent. These schemes won’t be around forever so make the most of them while you can.

But what if you haven’t been able to claim a tax break for your SME and you’re still looking to boost your capital? Liberis provide Business Cash Advances for small to medium size businesses to help them grow.

We’re different to other finance providers because we don’t charge fixed monthly repayments. Instead, we let you payback as you earn, so you’re never out of pocket.

If you’re interested, get in touch to discuss your business funding needs.

The Liberis Cash Advance - designed to help UK SMEs
  • Apply in minutes for £2,500-£300,000 and if successful see funds within as little as 24 hours
  • You pay back only when you earn – no fixed monthly payments
  • You keep 100% of your cash income
  • One clear cost, no APR
  • No fees, hidden charges or penalties. Ever
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Liberis is a responsible financial provider. Liberis does not offer 'short-term loans'. The minimum expected duration of a Business Cash Advance is 120 days / 4 months and typical expected durations are 6-12 months. These business financing products are not consumer loans.