With over half of small and medium sized businesses (SMEs) set to decline or close over the next year as the cost of living crisis continues, business owners can look to weather the storm with a range of tax benefits available.
According to the Federation of Small Businesses, 53% of SMEs in the UK are projected to stagnate, decline or close in the next year as they contend with higher energy and living costs. The FSB said a typical business in London is set to see its annual electricity bill jump from £4,700 to £21,200.
Tax refund app Tommys Tax said that whilst businesses are navigating this difficult territory, research has shown that over £20 billion of tax benefits still remain unclaimed every year and could act as a lifeline for businesses facing current headwinds.
Tommy McNally, CEO of Tommys Tax, says: “Many business owners may not be aware of the extent to which tax refunds could assist with the current financial pressures they’re facing. For instance, you can generally claim back 100% of the tax on office spaces, any technology such as laptops, phones, antivirus and office software, printing and even bank, overdraft and credit card fees.”
Paraplanner business owners could also claim a flat £1,000 using the trading allowance or claim every single business expense if this figure exceeds £1,000.
McNally says: “Be diligent with keeping all your receipts and bank statements and it will make the entire process a lot easier when the time comes. Record every transaction into your business account and make sure that you’re on top of reviewing your credit card statements.”
McNally also advises that business owners start an emergency fund, which could reduce the need to borrow money and prevent business owners from having to make difficult financial decisions to keep the business afloat.
Business owners are also advised to claim a tax refund on payroll admin fees if the company is charged after requesting a payroll firm to run their admin and payroll duties.
McNally adds: “Millions of tax rebates are left unclaimed. Knowing what you can and can’t claim for isn’t easy to understand. With nearly everyone impacted by the increase of cost of living across the board, there are ways in which people can inject a much needed-boost into their bank accounts.”
