Top Tax Breaks for Businesses

Claiming every bit of tax relief possible can noticeably reduce your tax bill, so you can put what’s left to better use instead of giving what feels like all your hard-earned profits to HMRC. We know getting to grips with it all can be tricky, so in this blog we’ll discuss what tax reliefs are, as well as the tax breaks you should know about.

What does tax relief mean?

‘Tax relief’ is a way to reduce the amount of tax you pay to the government because you’re ‘relieved’ of some of your tax liability. There are many different ways you might get tax relief, such as by claiming relief for working from home, claiming allowable expenses for your business, or as a result of contributing to a pension.

It’s completely legal – and encouraged – to claim any relief you’re entitled to. HMRC won’t chase you down for making legitimate claims (we promise).

Allowable business expenses

No matter what industry you’re in, running a business means you’ll incur business expenses. They’re inevitable – but the good news is you can claim the majority of your allowable business expenses back.

Allowable expenses include popular business costs such as:

• Business travel expenses, for instance train fares for business trips
• Clothing
• Cost of your business premises
• Training courses
• Staff costs
• Vehicles
• Marketing and advertising
• Legal and financial fees
• Items bought to sell on

It’s good to note most things you use ‘wholly and exclusively’ for your business can be classed as an expense. But if you’re ever unsure, speak with an accountant.

Business asset disposal relief (BADR)

Business Asset Disposal Relief is a type of tax relief that reduces the rate of Capital Gains Tax you’ll need to pay when you dispose of a business asset.

For example, a higher rate taxpayer will normally need to pay Capital Gains Tax at a rate of 24%, but if the asset qualifies for BADR then the rate is reduced to:

• 14% in the 2025/26 tax year
• 18% for gains made from April 2026 onwards

Business asset rollover relief (BARR)

There might be times your business has capital gains because it’s made a profit selling or disposing of an asset. If you use some or all of the gain to buy a new business asset, you might be able to use Business Asset Rollover Relief to delay paying tax on the gain. It’s available for both limited companies and sole traders.

Capital allowances

While you can claim your day-to-day business costs as an expense, capital allowances let you deduct an asset’s value against your profits in a different way. For example, the annual investment allowance (AIA) means you can deduct the full value of an asset in the year you bought it. If you use writing down allowances then you can claim tax relief against the asset’s value across its lifetime.

The rules around what you can claim and which assets qualify can vary depending on the type of allowance you claim, so it might be worth having a chat with your accountant before making any big purchases!

Creative industries tax relief

If you run a limited company in the creative sector you’ll be pleased to know there are different types of Corporation Tax relief you may be eligible for.

What you can claim depends on your area of work, but there are a vast number of relief schemes designed to help a wide range of businesses within the creative sector, such as:

• Animation Tax Relief (ATR)
• Children’s Television Tax Relief (CTR)
• Film Tax Relief (FTR)
• High-End Television Tax Relief (HTR)
• Video Games Tax Relief (VGTR)

National Insurance tax relief

If you’re an employer, you may be able to claim relief on some of your National Insurance Contributions (NICs). The Employment Allowance is a type of relief which helps employers reduce their annual bill for NICs by up to £10,500 per tax year.

There are also other relief schemes such as Employer’s NI relief for veterans and National Insurance Relief as a freeports employer.

Research and development (R&D) tax relief

If you have an original idea that’ll make moves in your industry, you could be eligible for research and development tax relief. This type of tax relief is designed to help companies working on new ideas in the science and technology fields. The best thing about it – your idea doesn’t need to be a huge success to receive tax relief for the money it spends on the project. So no pressure. Unfortunately, this relief is only available for limited companies, but it is available to any UK company of any size.

Small business rate relief

If you rent or own businesses premises, for example a shop, office, pub, warehouse, or holiday rental home, you’ll likely be charged business rates. They’re basically a tax on any non-domestic premises, so if you work from home, you can let out a sigh of relief.

It’s not all bad if you pay business rates though, because you can actually apply to your local council for small business rate relief. This means you could be entitled to a discount on your business rates, or in some cases the charges may be dropped all together.

Who can apply for small business rate relief?

You can receive small business rates relief if:

• Your business premises’ rateable value is less than £15,000
• Your business only uses one property (although you might still be able to get relief for multiple properties if the total rateable value of them all combined is less than £20,000, or £28,000 if you’re based in London)

How much small business rates relief am I entitled to?

It all boils down to your business’s ratable value. The higher it is, the less you’ll be able to claim. The good news is if you have one property and the rateable value is less than £12,000, you won’t need to pay any business rates.

How much relief you’ll be able to claim will gradually decrease between the £12,001 and £15,000 mark.

For example, let’s say your business premises rateable value is £13,500. You’ll receive 50% off your business rates bill.

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