UK Fact-File Part 5:
Small Business Incentive Programs

5.4 UK Individual Business Tax Holidays

Though there are no tax holidays as such, tax breaks and certain forms of tax relief are available in specific circumstances – for companies that invest in environmentally friendly equipment or systems, for example. This can relate to the acquisition of low-emission company vehicles or the purchase of energy-efficient heating systems.

The Enhanced Capital Allowance scheme (ECA) attracts tax breaks for investment in energy or water-saving systems. Relief can also be claimed for investing in new business premises or renovating premises, especially in disadvantaged areas. This relief would normally apply to production or manufacturing sites (ie not offices or shops). Capital allowances can be up to 100% of the cost.

Some specific forms of tax relief are available for:

• Payment of professional fees;
• Working on board a ship;
• Capital expenditure;
• Expenses incurred if working from home;
• The issuance of certain types of 'approved' share options;
• Energy efficiency investments;
• Vehicle & equipment leasing;
• Pension contributions;
• The film industry;
• Forestry;
• Charitable donations;
• Venture Capital Investment

Such reliefs are often conditional in various respects, and may apply differentially to self-employed people and to companies. Advice can be sought from HMRC or from any qualified accountant about the availability of relief and suitable structuring.

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