Being let off temporarily from paying taxes is every business operator’s dream, particularly for those running a startup. Forbes magazine contributor David Prosser says:
“How do we persuade investors to put their money into high-risk start-up businesses? It’s a challenge that is all the more pressing in a climate in which the banking sector in the UK, Europe, and elsewhere, is unable or unwilling to lend as much as it once did, particularly to bets it considers less safe.
The British Government thinks it has come up with an answer: by throwing tax breaks at investors through a new scheme, it has managed to unlock £82m worth of funding for start-up businesses over the past 12 months. This is small change compared to the billions invested in large blue chips, but the cash has helped more than 1,000 British companies that were previously struggling to find funding from other sources.”
Residents and budding business operators in Bristol may see the potential of not paying taxes, even for just awhile. At present, everyone living in the city pays taxes to the Bristol City Council, and Her Majesty’s Revenue and Customs requires income and corporation taxes from registered businesses. If your business could be in line for tax breaks and you want to use the payments wisely, it’s time for you to consult tax accountants in Bristol like Wormald and Partners Chartered Accountants.
Startups need to have a workable idea and the supporting documentation to convince investors of its viability, but the Seed Enterprise Investment Scheme (SEIS) penned by the Chancellor of the Exchequer George Osborne aims to turn things around. Under the programme, investments up to £100,000 will be subject to 50% tax relief upfront while no taxes will be imposed on the proceeds. A business looking for tax relief should have a labour pool of less than 25 people and assets totaling no more than £200,000; you may ask your tax specialist if your business is part of an industry covered under SEIS rules.
Deeper discussions with your trusted Bristol accountants will be beneficial if the SEIS exemptions potentially clash with Enterprise Zone Exemptions. Under current regulations, startups inside one of 21 such zones around the country are marked for 100% exemptions over the next five years.
Startups are not without risk when backers are asked to invest. However, accounting firms such as Wormald and Partners Chartered Accountants can help both business and investor make the most out of their partnership.
(Source: Tax Breaks For Investors In Startups Pay Off For Britain, Forbes, November 8, 2013)