At some stage the majority of businesses will have a requirement for a loan e.g. to pay for new plant & equipment or to provide the necessary funds for business expansion. Borrowing obviously comes at a cost, usually the interest charged on the capital borrowed. You can reduce the cost of such borrowing in 2 ways:

• Shop around for the best deals on interest rates and always have a current and detailed Business Plan available.
• Make sure you take advantage of the tax allowances that are available.

Leasing

• Businesses often choose to lease or rent such items as plant & machinery, as the costs are tax deductable thus helping to reduce total costs.

Buying

• If you choose to buy, you can also offset part of the cost against taxable profits. this is done by claiming Capital allowances through which a percentage of the cost is allowable against taxable profits. higher First year allowances are available to smaller businesses.
• Capital Allowances can be claimed regardless of whether you choose to buy the asset outright or acquire it through a finance agreemnet.
• A 100% annual investment allowance applies to the first £25,000 of allowable expenditure in each year.

Tax & Loan Interest Payments

• Loan interest incurred in acquiring buiness assets is a legitimate business expense and as such is allowable as tax deduction, provided is used solely for the purposes of the business.
• The same rules & proviso applies to interest on credit cards & overdrafts.

Our help & hints page has some useful guidance for CIS Subcontractors.

Office Hours:

Monday - Friday 08:00 - 21:00

Saturday 10:00 - 14:00

If you have any queries please contact us:

Tel:  0113 418 2058

Mob: 0779 4734711 (text Name & Address followed by "CISPACK" or "SATPACK") & we will send you a CIS Tax Return or Self Assessment pack.

Email: enquiries@cismadeeasy.co.uk

Alternatively, please use our contact form.

Use of this website is subject to & governed by our terms & conditions of use and privacy policy.