HMRC can help your business cashflow

In these difficult times, HMRC can help your business cashflow.  The main ones being the 80% grant towards the cost of salaries for those employees who have been furloughed and the equivalent grant for the self-employed. These have both now been extended.  Also local authority grants, the bounce back loan up to £50,000 and the VAT deferral have helped a large number of businesses although payment in respect of the last two will still need to be made at a future date.  You may wish to contact HMRC to discuss how HMRC can help your business cashflow.

Tax breaks

Businesses should also not lose sight of the tax breaks that were there before the COVID-19 outbreak.  The Annual Investment Allowance currently allows you to write off against taxable profits 100% of capital expenditure up to £1m.  This is due to fall to £200,000 from 1 January 2021.  If there is a large project that is required for the business and the cashflow allows, do not miss out on this. The carry back of losses can also generate cash by obtaining a refund of taxes paid in the previous year.  If this is applicable, every effort should be made to complete the accounts quickly after the year end to make a claim.  You might even consider change of year end date as a way of accelerating when the loss claim can be made.

R&D

Many businesses are regularly making Research and Development (R&D) claims to reduce their tax liabilities.  In these times when there may be losses and no tax liability to set the claim against, a small business can claim a tax credit of 14.5% of enhanced loss arising from the R&D claim which is then paid out to the business.

Payments

If there are taxes to be paid whether they be VAT, PAYE or Corporation Tax, time to pay arrangements can be agreed with HMRC.  Best to plan ahead with these and start talking with HMRC before the date that the taxes fall due for payment. To find out more on how Haines Watts can help you, please contact us.