Another facet of personal finance that executives do not always apply to the business world is knowing a company’s full tax allowances. As individuals, most people know they are allowed to earn so much before tax and, if applicable, use their dividend and capital gains tax allowance each year. They may even be using their annual Isa allowance to save money tax-free.
However, many businesses do not use all the tax allowances available because they either don’t always know they exist or they don’t understand them fully. A case in point is tax relief on research and development, which only a small proportion of eligible companies claim, according to Mark Tighe, founder of tax specialist business, Catax.
“Business owners always get great advice on making full use of the tax system for their work and personal pensions from their accountants but, in our experience, the same isn’t always true of R&D tax allowances,” he says. “If you’re involved in using science or technology of some form to make a bespoke product that carries risk of it working well or not, then you are likely to be able to claim against a total sum equal to 130% on top of the original expense.” So, a £100,000 bill for R&D staff, for example, will result in an R&D claim against a £230,000 cost.”
Read more here