Government Schemes and Tax Incentives in the UK

There are many different government-backed schemes, at national and local levels available for businesses. There are also tax incentives, investment and financial schemes that you can use to help your business grow.

Local competitions are usually open only to local businesses, but you can apply for many of the national ones as well if you are looking for ways to save and increase your bottom line.

Research and Development Initiatives

Companies that innovate and pioneer new technologies have an advantage in the UK market, because they may be eligible for Research and Development Relief for Corporation Tax. Full eligibility requirements can be verified on the HMRC website, but to be eligible your company must be liable for payment of Corporation Tax in the first place. There are two levels to this scheme worth checking out:
- Small or Medium-sized Enterprise (SME) scheme
- Large Company Scheme (LME)

The only drawback to this scheme is that you cannot claim returns on the subcontractors you hire, so it might not favour those companies who do a lot of outsourcing.

Funding for Start-ups

There are also many initiatives available for businesses that are just starting up. For instance:
- The Seed Enterprise Investment Scheme (SEIS) provides tax breaks for projects that are deemed too risky by financial investors
- The Enterprise Investment Scheme is a similar program that has been running since the 1990s

Apart from the above, there are also low-interest or no-interest loans, government guaranteed loans, grants and subsidies that may or may not be renewable, repayable contributions, equity financing and other tax refunds or tax credits.

Entrepreneurial Tax Relief

When you sell your business in the UK, you are only taxed at 10% under this scheme, to a lifetime allowance of £10 million. This is an ideal way for a company that is pioneering research and development to grow. By inventing and creating patents, which are then sold or licensed, an individual inventor can enjoy lower tax rates until they build a sizeable investment.

Taking Care of the Environment

There are also programmes available for small businesses that want to improve their energy footprint on the planet. The Domestic Renewable Heat Incentive is just one example of many programmes that allow businesses to subsidise or pay for the installation cost of efficient heating systems in older buildings that will bring them up to par with 21st century requirements.

In addition to this, there are also many private and publicly owned companies offering rebates, subsidies, and grants for the installation of renewable energy systems. This applies to solar panels, wind turbines and hydro installations. The Tax Free Cycle Scheme is another environmentally friendly initiative started by the UK government to help employees to get a bike tax-free, which is about half the cost of buying it on your own. This is a huge advantage for those companies who want to help out by encouraging their workers to get to work using alternative methods to cars.

Career Skills and Training

If you are looking to expand some aspect of your office-based business, then you might also need to learn new skills to complement your existing ones. Unfortunately, training costs time and money, and therefore the government has developed schemes to help with subsidies or grants for further education. If the learning is going to be used for a clear business purpose and you are claiming it on your tax return then you may be eligible.

There are different categories of grants and bursaries and other types of support based on your age, your career path, and the number of years you have been in business. The best place to have a look to see if you are eligible is on the National Careers Services website.

Working with a Financial Adviser

The best way to find out what programmes you could be eligible for with your small business needs is to consult with a financial adviser at your local bank or government office for businesses. Your local Jobcentre might have information about where you could go and what professionals you could see.

If you are a small business, you should work with a financial adviser as much as possible to make sure that you can apply for as much funding and credits as available. There are many incentives and they have been provided in order to help businesses operate and grow in the UK.

If you already have an accounting team, make sure that you ask them to research these for you on a regular basis, as eligibility requirements can change frequently. In addition, there are many new business incentives constantly being funded and developed, so it's usually only a matter of time before you are able to see some kind of return.