The Current Landscape of Corporation Tax
The 2022/23 tax year witnessed a remarkable surge in Corporation Tax receipts. HMRC highlighted an increase of £17.3 billion, culminating in a staggering £84.7 billion in total collections. While this influx is beneficial for government reserves, it inevitably sparks concerns for business proprietors regarding their tax obligations.
Tax Reliefs and VAT Reclaims
Despite the intimidating figures, there’s a beacon of hope for businesses. A myriad of tax reliefs and VAT reclaims are at their disposal, potentially offsetting some of these financial pressures.
Delving into Tax Reliefs
Research and Development (R&D) Tax Credits
For businesses at the forefront of innovation, R&D tax credits can be a boon. These credits can either diminish your Corporation Tax bill or, for certain SMEs, manifest as a cash payout.
Capital Allowances
This provision allows businesses to subtract the expense of specific capital assets, like machinery or business vehicles, from their taxable profits.
Enterprise Investment Scheme (EIS) & Seed Enterprise Investment Scheme (SEIS)
Both schemes are designed to boost investment in businesses, especially startups. They offer enticing tax reliefs to investors, making businesses more appealing for investments.
Navigating VAT Reclaims
Input VAT
Businesses have the privilege to reclaim VAT on goods and services acquired for business purposes. However, some exceptions, like entertainment expenses, apply.
VAT Refunds for International Business Visitors
Business visitors from abroad might qualify for VAT refunds on purchases made during their UK visit.
Flat Rate Scheme
Tailored for smaller businesses, this scheme simplifies the VAT process and can lead to monetary savings.
The Way Forward
The escalating Corporation Tax might appear daunting, but with the right knowledge and strategy, businesses can navigate this landscape effectively. By leveraging available tax reliefs and VAT reclaims, businesses can not only diminish their tax liabilities but also foster investment and expansion.
Get in touch
At AIT Accountants, we’re committed to guiding you through the complexities of taxation. If you’re seeking expert advice on tax reliefs and how your business can benefit, reach out to us today.
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