If your business is eligible, you may be able to claim certain tax reliefs.
From April 1st 2021 until March 31st 2023, companies investing in certain new plant and machinery assets will be able to claim:
- a 130% super-deduction capital allowance on qualifying plant and machinery investments
- a 50% first-year allowance for qualifying special rate assets
The super-deduction will allow companies to cut their tax bill by up to 25p for every £1 they invest in assets such as:
- Solar panels
- Computer equipment and servers
- Tractors, lorries, vans
- Ladders, drills, cranes
- Office chairs and desks
- Electric vehicle charge points
- Refrigeration units
- Foundry equipment
Business Rates Relief
You can get small business rate relief if:
- your property’s rateable value is less than £15,000
- your business only uses one property - you may still be able to get relief if you use more
Contact your local council to apply for small business rate relief.
What you get
You will not pay business rates on a property with a rateable value of £12,000 or less. For properties with a rateable value of £12,001 to £15,000, the rate of relief will go down gradually from 100% to 0%.
There are also specific reliefs in place for:
- some rural businesses
- charities and amateur community sports clubs
- and those based in Enterprise Zones
Claim Capital Allowances
You can claim capital allowances when you buy assets that you keep to use in your business, such as equipment, machinery and business vehicles like cars, vans or lorries. You can deduct some or all of the value of the item from your profits before you pay tax.
If you are a sole trader or partner and have an income of £150,000 or less a year, you may be able to use a simpler system called cash basis instead.
Enhanced Capital Allowances
If you buy an asset that qualifies for first year allowances, you can deduct the full cost from your profits before tax.
You can claim ‘enhanced capital allowances’ (a type of first year allowances) for the following energy and water-efficient equipment:
- some cars with low CO2 emissions
- energy saving equipment that’s on the energy technology product list, for example certain motors
- water saving equipment that’s on the water efficient technologies product list, for example meters, efficient toilets and taps
- plant and machinery for gas refuelling stations, for example storage tanks, pumps
- gas, biogas and hydrogen refuelling equipment
- new zero-emission goods vehicles
The Energy Technology List (ETL) can help organisations select equipment with a high standard of energy efficiency, thereby reducing operational costs.
Read more information on claiming first-year enhanced capital allowances.
You can claim first year allowances in addition to annual investment allowance - they do not count towards your AIA limit.
Corporation Tax – Marginal Relief
You may be able reduce your tax bill by claiming Marginal Relief if your profits before April 1st 2015 were between £300,000 and £1.5 million.
Corporation Tax relief on R&D projects
Research and Development (R&D) reliefs support companies that work on innovative projects in science and technology.
You may be able to claim Corporation Tax relief on your R&D project. It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects.
Projects that count as R&D
The work that qualifies for R&D relief must be part of a specific project to make an advance in science or technology. It cannot be an advance within a social science - like economics - or a theoretical field - such as pure maths.
The project must relate to your company’s trade - either an existing one, or one that you intend to start up based on the results of the R&D.
Creative Industry Tax Relief
This relief allows qualifying companies to claim a larger deduction, or in some circumstances claim a payable tax credit, when calculating their taxable profits.
Your company can claim creative industry tax reliefs if it is:
- liable to Corporation Tax
- directly involved in the production and development of:
- high-end television
- children’s television
- animation television
- video games
- theatrical productions
- orchestral concerts
- museum or gallery exhibitions
- involved with decision-making
- directly negotiates, contracts and pays for rights, goods and services
Find out if your creative industry company qualifies for Corporation Tax Relief, and how to make a claim.
The Patent Box
The Patent Box enables companies to apply a lower rate of Corporation Tax to profits earned from its patented inventions after April 1st 2013.
Your company must own or exclusively license-in the patents and must have undertaken qualifying development on them.
Your company could also benefit from the Patent Box if it holds certain other medicinal or botanic innovation rights.
Disincorporation Relief allows a company to transfer certain types of assets to its shareholders (who continue to operate the business in an unincorporated form) without the company incurring a Corporation Tax charge on the disposal of the assets.
Charities and Tax
Charities don’t pay tax on most types of income as long as they use the money for charitable purposes.
Community Amateur Sports Club (CASC)
To benefit, you need to register as a CASC.
Tax when your limited company gives to charity
Your limited company pays less Corporation Tax when it gives the following to charity:
- equipment or trading stock
- land, property or shares in another company
- employees (on secondment)
- sponsorship payments
There are different rules for sole traders and partnerships.