Understand your company's position and learn more about the options available
All you need to know about corporation tax relief
- Close Company With Debts
- No.1 For Liquidations
- Stop HMRC / Creditor Pressure
- 25,000+ Directors Helped
- Immediate Advice Available
- Insolvency Practitioners
A director's guide to corporation tax relief
As a limited company director you’re required to file a corporation tax return within 12 months of the accounting year-end. The return will include various reliefs and allowances and because you, rather than your accountant, are ultimately responsible for its accuracy, it’s a good idea to get to grips with the corporation tax relief rules.
Unfortunately, understanding these rules and regulations isn’t always an easy task thanks to the frequent changes in tax legislation. It’s advisable to seek professional help in this respect, so you can minimise your company’s liability without the risk of incurring HMRC fines.
Real Business Rescue offers independent advice on corporation tax which allows you to benefit from all the reliefs available for your business. We’re a major part of Begbies Traynor Group - the largest professional services consultancy in the UK.
Take Our Free 60 Second Test
Get an instant understanding of your:
- Debt and Asset Position
- Formal Insolvency Options
- Next steps
Plus much more ...Start The 60 Second Test
Corporation tax is paid on the profits of limited companies based in the UK, and international branches of companies permanently resident here. Under UK GAAP (Generally Accepted Accounting Practices) and International Accounting Standards, deductions and reliefs are available on a number of business expenditures.
Claiming these reliefs reduces your company’s liability for corporation tax, but it’s a complex area that can lead to problems if you’re not careful. Claiming reliefs when you’re ineligible attracts the attention of HMRC, and can instigate an investigation into the company’s tax affairs.
Dealing with HMRC debts?
If you are experiencing pressure from HMRC for unpaid tax liabilities, you are far from alone. In fact HMRC is the most common creditor of businesses in the UK. For expert help and advice in tackling your tax debt, call our team.
The team are available now - 0800 644 6080
Research and Development (R&D) Relief
The R&D scheme allows for the deduction of qualifying research and development costs from trading revenues. You may also be able to claim a further 130% tax relief from your trading profits. Two schemes are available depending on the size of your company – the Small or Medium-sized Enterprise (SME) Scheme, and the Large Company Scheme.
Tax relief on patents
The government’s Patent Box scheme offers 10% relief on corporation tax, and may apply if your company makes a profit from its owned patented inventions, or those to which you have exclusive licensing rights. You may also be eligible to use it for a patented manufacturing process.
Creative Industry Tax Reliefs (CITR)
Seven different tax reliefs are available for companies within the creative industries. These essentially increase the level of allowable expenditure that can be claimed, and potentially offer a tax credit to eligible businesses.
You can claim corporation tax relief on donations made to charities and Community Amateur Sports Clubs (CASCs). If a loan is provided it wouldn’t qualify, however – it has to be a donation. There are also limits on the amount that can be claimed should you receive a non-monetary item in return for the donation – tickets or passes, for example.
Can’t pay CBILS or Bounce Back Loan?
Don't worry - there are thousands of other company directors in the same position. If you are struggling to keep up with your Covid loan repayments, speak to a member of the Real Business Rescue team to discuss your options. It's Free & Confidential.
The team are available now - 0800 644 6080
Accrued bonuses for directors and employees are allowable for tax relief if they’re paid within nine months of your company’s accounting year-end.
Employee share acquisitions
When your employees acquire shares at an undervalue in the company, they become liable for income tax on the undervalue. A corporation tax relief is also available for you as the employing company.
Employer pension contributions
If you pay employer pension contributions into a registered scheme, you may be able to claim tax relief. This depends on the level of contributions made - if they’re purely benefitting directors or shareholders to an unjustifiable extent, HMRC may question their legitimacy.
Business Asset Rollover Relief
When you sell a business asset, your company becomes liable for corporation tax on the chargeable gain. By reinvesting the proceeds from sale into the purchase of another asset that’s used purely for business purposes, you may be eligible to defer the tax payment.
Need to speak to someone?
If your company is struggling with unmanageable debts, squeezed cash flow, or an uncertain future, you are far from alone. We speak to company directors just like you every single day, and we are here to give you the help and advice you need.
Call our team today on 0800 644 6080
Corporation tax relief for leased cars
You can claim 20% corporation tax relief when you lease a car for your business - it’s available on the total annual sum minus VAT. In some cases this can be cheaper than buying a company car, as tax relief depends on its value and CO2 emissions on purchase.
For start up companies
The Seed Enterprise Investment Scheme (SEIS) provides incentives for individuals to invest in your company (up to £150,000 in overall funding) if it’s been trading for less than two years, and has an asset base of under £200,000.
Real Business Rescue can provide further advice on corporation tax relief, and how to minimise your company’s liability.
Further Reading on A director’s guide to corporation tax relief
Real Business Rescue are here to help
Still unsure whether liquidation is right for your company? Don't worry, the experts at Real Business Rescue are here to help. Our licensed insolvency practitioners will take the time to understand the problems your company is facing before recommending the best course of action going forward based on your own unique circumstances.
- UK’s Largest Liquidators
- 100+ Offices Nationwide
- 100% Confidential Advice
- Supported 25,000+ Directors
Looking for immediate support?
Complete the below to get in touch
We provide free confidential advice with absolutely no obligation.
Our expert and non-judgemental team are ready to assist directors and stakeholders today.