• Date

    24 May 2021
  • Category

    Tax, Corporate Tax, Employer Solutions, Capital Allowances, R&D Tax Incentives

Tax Top Tips - Three “must do” things for businesses in May 2021

May is the month for optimism and growth, with the easing of lockdown rules and the feeling that normal life is back within reach. Now is the time for business owners to look to the future, maximising the tax benefits available for capital investment and innovation.

Business Owners

 

1

Super deduction and the SR Allowance

 

The recent introduction of two new enhanced capital allowances – the Super deduction and the SR Allowance - give companies up to 130% tax relief on the qualifying cost of capital investment.

Both reliefs are in addition to the ongoing Annual Investment Allowance which already gives relief for costs of qualifying plant and machinery of up to £1M (2021) in the tax year of purchase. There is no limit or cap on the amount of capital investment that can qualify for the super deduction or the SR Allowance.

  • Super deduction’ includes all new plant and machinery that ordinarily qualifies for the 18% main pool rate of writing down allowances and gives relief of 130% on qualifying expenditure.
  • ‘SR allowance’ covers new plant and machinery qualifying for special rate pool, including integral features in a building and long-life assets offering relief of up to 50%.

Certain assets do not qualify for relief such as cars or second-hand equipment but the majority of brand-new plant machinery and equipment for use in your trade is likely to qualify.

We have the benefit of our Strategic Partnership with Propel Asset Finance to help clients acquire plant machinery and equipment to fuel growth, and with these two new tax reliefs in place there has never been a better time to consider capital investment.

2

Research & Development (R&D)

 

There are still many companies missing out on this valuable relief designed to support innovative businesses. Eligible businesses can claim benefit from additional tax relief of up to £24.70 for every £100 of qualifying expenditure, or even a cash grant in some cases.

To qualify for R&D Tax relief a project must seek to make an appreciable improvement in its field in order to create a scientific or technological advancement. This can be a product, device, material or a process improvement and claims can be across a wide range of industries and sectors.

If you have come across a problem in your business and have used some element of science or technology to try to fix it then you might have a potential claim, even if your development was unsuccessful or aborted.

If you are not sure whether your project might qualify for this valuable relief, please speak with your usual Azets contact or find out more regarding our R&D tax services.

3

VAT & Partial Exemption Calculations

 

If your business is VAT registered and makes any exempt supplies, HMRC have announced temporary alterations that can be made to VAT calculations to take account of the impact COVID has had over the last 12 months.

Typical businesses that are likely to be affected include those in the arts, culture, property, health, education, welfare, financial services and insurance sectors.

If you are about to make your partial exemption annual adjustment, please sign up for our must see webinar to make sure you are not paying too much or too little VAT to HMRC.

Click here to find out more and register. 



 

At Azets, we strongly believe that planning is essential to ensure that individuals and businesses are fully briefed on key changes and how they may be impacted as a result.

We also know how important it is to have certainty regarding the tax you pay and our national tax experts, based locally to you, are on hand to provide support through the taxing times that are certainly ahead of us.

For further information on the areas raised in this insight, or to discuss in more detail, please speak with  your usual Azets contact or a member of our tax team.

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