SMEs are missing out on tax breaks

Start-ups and small to medium-sized businesses across Lancashire are potentially losing thousands of pounds by failing to take advantage of lucrative tax breaks.

Gill MolloyPreston business advice specialists, Champion Accountants, is urging local entrepreneurs to be pro-active and reap the benefits of the Annual Investment Allowance (AIA).

Doubling the allowance to £500,000 was among the chancellor’s business-boosting measures in Budget 2014. However, this tax relief on qualifying expenditure is a temporary increase and the threshold will revert back to just £25,000 as of 1 January 2016.

This qualifying expenditure includes office furniture, computer hardware, commercial vans and lorries, agricultural, construction and engineering equipment and building fixtures such as shop, kitchen and bathroom fittings. Assets not covered by AIA include buildings, land and cars.

“The government hopes that doubling the AIA will encourage innovation and investment in the UK, but I still think there’s a great deal of work to be done to raise awareness amongst local entrepreneurs,” explains Gill Molloy, group tax director at Champion Accountants.

“Almost all UK businesses (99.8%) are eligible to claim AIA therefore any companies that have been putting investment on the back burner, now is the time to act.” “The generous relief offers businesses the ideal opportunity to shelter profits by investing in new equipment, with a company getting a reduction of £1 in taxable profits for every £1 they spend.”