New firms missing out on IT tax breaks
The owners of new businesses are failing to take advantage of tax breaks that were extended in this year’s Budget to help them with the cost of purchasing IT, a survey has revealed.
In a bid to help smaller businesses afford the IT equipment they need to succeed, the Chancellor extended the Capital Allowance scheme until March 2004, enabling qualifying firms to claim 100 per cent tax relief on IT purchases.
But a survey undertaken by bCentral has revealed that 89% of small firms are unaware of the new tax break.
With 40 per cent of small businesses believing that they can’t afford to buy the equipment they’d like or that they will be able to afford to upgrade next year, thousands could be struggling unnecessarily.
John Coulthard, small business manager for Microsoft, believes there could be as much as £13 million worth of unclaimed tax cuts waiting to be claimed.
“Businesses are losing out on the benefits of an effective IT sytem due to their cashflow restrictions. For many this barrier would be overcome with the provision of 100% tax relief on IT purchases,” says Coulthard.
To be eligible to claim 100 per cent tax relief, small businesses must have a turnover of less than £2.8 million a year, have assets worth not more than £1.4 million and employ less than 50 people.
To find out more about the scheme, ask your accountant or check out this Inland Revenue advice.