Whether you file your own tax returns or have an accountant do it for you, it pays to keep an eye on every possible deduction and allowance that can help you keep your tax bill down.
“For example, while most businesses are good at keeping a careful record of the allowable expenses that they can offset against their profits, most businesses don’t claim what they’re entitled to when it comes to capital allowances,” says Business Adviser Peter Weeks of Business Link.
“Where expenses apply to day-to-day running costs, capital allowances permit you to claim a proportion of your bigger purchases, such as computers, vehicles and other equipment,” adds Peter
“Rather than claim the whole cost of these assets back, you usually get to claim a proportion of the value back each year. Normally, this proportion is 25 per cent. However, small businesses can claim up to 50 per cent in the first year after the asset is purchased.”
There are also categories of capital spending that attract a 100 per cent first year allowance. “These include environmentally friendly equipment as well as assets bought for any research-and-development activities you carry out,” Peter explains.
Find out more about Capital Allowances, or visit the Taxes, Returns and Payroll section of the Business Link website.
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