HM Revenue & Customs (HMRC) has issued advice to small and medium-sized businesses on what government support is currently available as they face rising costs.

The financial support, described as initiatives to help SMEs “invest and grow”, include Employment Allowance, discounts on software, super-deduction and the Annual Investment Allowance.

It has recommended businesses look at claiming up to £5,000 through Employment Allowance, the tax relief that allows eligible businesses to reduce their National Insurance contributions (NICs) bills each year.

Businesses can claim this if their employer Class 1 National Insurance liabilities were less than £100,000 in the previous tax year.

In April this year, the Employment Allowance was raised from £4,000 to £5,000 to further benefit SMEs. This is worth up to £1,000 for nearly half a million SMEs – 30% of all businesses.

This includes around 50,000 businesses that will be taken out of paying NICs and the Health and Social Care Levy entirely.

HMRC has also flagged up how businesses can get a discount of up to £5,000 on software through Help to Grow: Digital, a UK-wide government-backed scheme that aims to help businesses choose, buy and adopt digital technologies that will help them to grow.

Eligible businesses can receive a 50% discount on buying new software worth up to £5,000 per SME, alongside free impartial advice and guidance about what digital technology is best suited to boost their business performance.

The Help to Grow: Management scheme provides small businesses with access to world-class business expertise on everything from leadership and financial management to marketing and digital adoption.

This is delivered through leading UK business schools, alongside one-on-one support from a business mentor and is 90% funded by the government.

By the end of the programme, business owners should have a growth plan to help them lead and grow their business.

Businesses which have previously taken part in the course – including James Lister & Sons, Wilkinson Construction Consultants and Seacat Services – have strongly recommended the programme to anyone who is trying to grow their business.

The Help to Grow programme is open to UK-based SMEs who have been actively trading for at least one year and have a total of between five and 249 employees.

Another source of support highlighted by HMRC is super-deduction and Annual Investment Allowance. To spur business investment, the super-deduction allows companies to cut their tax bill by 25p for every £1 that they invest in any qualifying machinery and equipment.

This can include the purchase of a variety of plant and machinery, computer equipment, most commercial vehicles such as vans, and office furniture.

The temporary £1 million limit for the Annual Investment Allowance has also been extended to the end of March 2023. This had been due to revert to £200,000 at the start of 2022.

The Annual Investment Allowance allows businesses to spend up to £1 million on qualifying business equipment and deduct in-year its full cost before they calculate their taxable profits.

Both of these tax breaks remain available for firms to take advantage of until the end of March 2023, by incurring qualifying expenditure before then.

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