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Does anyone know about this?
Last year I was considering being a Limited Company, and was told of a GOVT scheme where in the first year only, I could spend up to £10K on equipment, tools, van etc, an d it would be deducted from my tax bill?
So effectively I would end up paying £10k less in tax.
It was pre-covid, but Ive searched t'internet and found nothing
ltd co's only pay corp tax on profits (19% of profits for most small companies), spending money on those things will reduce your profit (as will salaries, pension contribs etc, but crucially dividend payments come out of profits and hence do not reduce your corp tax bill) , and hence your corp tax bill. Thats standard stuff though, no special cases there.
Not sure what scheme you are referring to.....
It was definitely a Gov incentive,only in the 1st year of business, 10K max
jim2w
thanks but Im sure its not that, iirc(?), as any vehicle and tools were included
No it won't be 10K less in tax.
It's 10K off your profits from deductable expenses. Which in turn is 1900 less in tax.
When I started my ltd co a couple of years ago I was advised I could buy equipment in the first year but I can't find the details from my accountant off hand. I'm in IT so i bought a laptop, office equipment etc.
Don't forget though, if you spend 10k you won't save 10k in tax. You will pay corporation tax on 10k less than you make in profit. E.g. if you make 100k profit, instead of paying 19% on 100k, you'd pay 19% on 90k.
Edit: I took too long logging in! What @Rone said.
If you don’t have an accountant yet just call HMRC / Gov business support and ask them about how you can cut startup costs and take advantage of any schemes they are running based on your sector.
https://www.gov.uk/business-support-helpline
auric - if you have an accountant, that's a task for them; they should have the answer ready available.
If you don't have one, get one.