Tax credits? tax reliefs? For new businesses. What are these? I read this:?

Question

"Self employed people can claim tax credits, depending on their income level and circumstances. Plus, there are some additional tax reliefs specifically designed for new businesses."

What does this mean please??

Answer 1

Tax credits are paid to people on a low income or with children. You can get this even if self employed. If you know how much you are likely to make you can work out how much Tax Credits you will receive on line at: http://www.taxcredits.inlandrevenue.gov....

Additional Tax reliefs for a new business is seperate to Tax Credits. it includes capital allowances for investment in equipment and premises, tax relief and credits for spending on research and development and stamp duty relief in disadvantaged areas. You should seek expert help with this, but details are at http://www.businesslink.gov.uk/bdotg/act...

Answer 2

Tax relief allows an individual or business to reduce a tax liability by claiming allowances--for example each individual has a personal allowance for income- above which tax is charged. Tax credits are payments made in effect to increase net income--e.g for the lower paid or single parent. Tax relief and tax credits are in principle available to employed and self-employed individuals. As regards tax reliefs available for new businesses, this covers such things as cost of equipment and resources and research and development. It is not straight-forward however and good professional advice needs to be taken BEFORE setting up the business.

Disclaimer:

The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances.  To find and IFA please call 0800 085 3250 or go to http://www.unbiased.co.uk.