Since 2008 when the economic climate changed a lot of people have seen the entrepreneurial side to themselves rise to the surface and used this time as an opportunity to start their own business. There are many considerations you will need to look into when deciding if this is the right option for you with money usually being a fairly big consideration.
A recent study showed that few people knew what capital allowances were or understood them, when starting a business it is a good idea to familiarise yourself with incentives available such as capital allowances and tax relief and how your start up could benefit. As capital allowances can offer up to £100,000.00 of tax relief in the first year.
Firstly let’s look at what capital allowances are and who is eligible for them :-
When a business is thinking of investing in an asset, which can vary depending on the industry, but the overall areas to look at are:-
Enhanced capital allowances – environmental based tax relief.
Disposal of assets
Acquiring new assets
Ongoing fixed assets
They may be able to claim capital allowances (tax relief) to reduce the financial burden for the company, which early on in a company’s life can help the business grow, develop and be competitive.
Capital allowances, as the recent study demonstrated are a fairly complex subject and having an
understanding of how your business could benefit requires specialist knowledge to your specific situation and requirements together with looking at your specific investments/assets.
Also it is worth pointing out that from April 2012 the tax relief currently available is significantly reduced from £100,000.00 to £25,000.00.
At any time a business should be aware of when it can benefit financially and in this case from tax relief and capital allowances it should look at the above areas and identify whether any assets they have fall into these areas.
Chris Simons recently decided to set up his own business and found the possibility of capital allowances and tax relief to be a huge financial relief.