There are several incentives offered by the Government that small or medium businesses (SME) can access now to help them invest and grow.
1. Claim up to £5,000 with the Employment Allowance
Employment Allowance allows eligible employers to reduce their National Insurance Contribution (NIC) liability each year. Last month, HMRC increased the Employment Allowance from £4,000 to £5,000 to further benefit SMEs, which is a new tax cut worth up to £1,000 for nearly half a million SMEs.
Businesses will pay less Employers’ Class 1 National Insurance each time they run their payroll until the £5,000 has gone or the tax year ends (whichever is sooner), if their Class 1 National Insurance liabilities were less than £100,000 in the previous tax year. To find out if your business is eligible, get in touch today or find out more here.
2. Help to Grow: Get a discount of up to £5,000 on new software
The Government provides two ‘Help to Grow’ programmes to assist SMEs grow their business and build towards reaching its full potential:
- Help to Grow: Digital
This is a UK-wide Government backed scheme which allows businesses to choose, buy, and adopt digital technologies which will help their business develop.
Eligible businesses can receive a 50% discount when buying new software, worth up to £5,000 per SME. Businesses can also access online, free impartial advice and support about how digital technology can boost their business’ performance.
- Help to Grow: Management
This scheme provides SMEs with access to a 12-week learning course on a range of topics from leadership and financial management to marketing and digital adoption, all designed to fit alongside work commitments.
This management course is 90% funded by the Government so businesses only pay £750, and it is delivered through leading UK business schools and by one-on-one support from expert business mentors.
By the end of the management programme, businesses will have developed a business growth plan to help reach their full potential.
To be eligible, businesses must be a UK-based SME, actively trading for at least one year, and have a total of between 5 – 249 employees.
3. Get up to half off Business Rates – from April 2022
There is a new business rates relief scheme which allows businesses such as small retail, hospitality, and leisure properties worth £1.7 billion in 2022/23, to benefit from 50% off their business rates bills, up to a cash cap limit of £110,000 per business.
The Government will reimburse local authorities that use their discretionary relief powers to grant relief. To find out which properties can benefit from relief, please get in touch or find out more here.
In addition, the business rates multipliers, which are used to calculate how much business’ rates should be paid, have been frozen for another year. For 2022 to 2023 the business rates multipliers are 49.9p for the small business multiplier and 51.2p for the standard multiplier.
From April 2022 there are no business rates due on a range of green technology, including solar panels and batteries, whilst eligible heat networks will receive 100% relief, helping business save around £200 million over the next five years.
4. Invest in your Business: Super-deduction and Annual Investment Allowance (AIA)
- The Super-deduction
For expenditure incurred from 1 April 2021 until the end of March 2023, companies can claim 130% capital allowances on qualifying plant and machinery investments and a 50% first-year allowance for qualifying special rate assets.
Under the super-deduction, for every pound a company invests in any qualifying machinery and equipment (which can include the purchase of computers, most commercial vehicles, and office furniture), their taxes are cut by up to 25p ensuring the UK capital allowance regime is amongst the world’s most competitive.
- Annual Investment Allowance (AIA)
The AIA provides 100% relief for plant and machinery investments up to its highest ever £1 million threshold until 31 December 2021. Originally due to revert to £200,00 at the start of 2022, the extension of the £1 million limit for the Annual Investment Allowance allows businesses to spend up to £1 million on qualifying business equipment and deduct in-year its full cost before calculating taxable profits.
You can only claim AIA in the period you bought the item. The date you bought it is:
- when you signed the contract, if payment is due within less than 4 months, or
- when payment is due, if it’s due more than 4 months later.
You cannot claim AIA on business cars, items owned for another reason before starting the business, and items given to the business or business owner(s).
For more information, please get in touch or find out more here.
5. Fuel Duty
From 23 March 2022, the Government has implemented a 5p per little fuel duty cut on petrol and diesel for 12 months.
This cut, with the additional freeze in fuel duty in 2022 to 2023, will represent a £5 billion saving worth approximately:
- £200 for the average van driver
- £1,500 for the average haulier
If you have any further related SME queries, please get in touch and we can give you tailored financial advice for your business. To find out what other support may be available for your business, please contact Paul Webb at email@example.com, or search ‘business support’ on GOV.UK.