In her 2024 Autumn Budget, the chancellor, Rachel Reeves, announced several key changes that could affect how you manage your business finances.
As of 6 April 2025, the rate of employer National Insurance contributions (NICs) rose from 13.8% to 15%. Depending on the size of your workforce, this could have a significant effect on your outgoings.
Additionally, from 6 April 2026, relief from Inheritance Tax (IHT) on business and agricultural property assets that exceed £1 million is set to fall from up to 100% to 50%. This means that certain business owners and family farmers may face IHT at a rate of 20% when they pass on an estate worth more than £1 million.
In light of these changes, you may already be reviewing your finances and looking for opportunities to mitigate any potential rise in costs.
As such, claiming available tax reliefs could become an increasingly important way to maintain the financial health of your business.
Keep reading to learn about three business tax reliefs and allowances that you may be able to take advantage of.
1. Business rates reliefs
If you own a non-domestic (commercial) property – such as a shop, office, pub or factory – it’s likely that you pay business rates to your local council.
How much you pay will depend on the type and “rateable value” of your business property – an estimate of the annual rental income the property would generate on a specific valuation date.
An example provided on the government website shows that a business owner in England with a property that has a rateable value of £10,000, might have been liable to pay £4,990 in basic business rates during the 2023/24 tax year.
As such, business rates can be a significant overhead, especially for small businesses.
That’s why the business rates reliefs can be so valuable. The government website provides a full list of the reliefs available. Here are four of the most commonly used:
Small business rate relief
You may be eligible for this relief if your business uses a single property, and it has a rateable value of less than £15,000 (2025/26).
If your business uses multiple properties, you may still be able to claim, provided that the rateable value of each property does not exceed £2,899 and their total rateable value is less than £20,000 (or £28,000 in London).
How much you’ll get will depend on your property’s rateable value.
Rural rates relief
This relief is designed for businesses in an eligible area with a population below 3,000.
Your business must also be:
- The only village general store, food shop or post office, with a rateable value of up to £8,500
- The only public house or petrol station, with a rateable value of up to £12,500.
Charitable rate relief
This is only available to charities and community amateur sports clubs. You cannot receive this type of relief and small business rate relief at the same time.
Retail, hospitality and leisure relief
If you own a business in this sector, such as a shop, restaurant, or music venue, you may be able to get 40% off your business rates for the 2025/26 billing year (1 April 2025 to 31 March 2026).
The maximum relief available each billing year is £110,000 for each business.
2. Employment Allowance
While employer NICs increased from 6 April 2025, the Employment Allowance also rose from £5,000 to £10,500 from this date.
What’s more, this allowance is no longer limited to employers with NI bills of £100,000 or less, as it was before April 2025.
So, if you employ staff, claiming this allowance could help you reduce your annual National Insurance (NI) liability.
The way it works is that your employer Class 1 NICs will be reduced each time you run your payroll until you’ve used your £10,500 allowance, or until the tax year ends (whichever is sooner).
To be eligible for this allowance, both of the following must apply:
- You’re a business or public body
- You do less than half your work in the public sector.
You cannot apply if you are the only director of your company and there are no other employees who are liable for secondary Class 1 NICs.
3. Annual Investment Allowance
You can deduct the full value of any item that qualifies for the Annual Investment Allowance (AIA) when calculating your business’s taxable profits.
The AIA applies to most plant and machinery worth up to £1 million (2025/26). However, some items are excluded from AIA, such as business cards.
It’s also worth bearing in mind that the annual AIA limit has changed several times since April 2008, so you’ll need to adjust your claim depending on the period you’re claiming for. You may also need to adjust the amount you claim if your accounting period is more or less than 12 months.
Seek advice from a financial professional to ensure you’re making the most of tax reliefs and allowances
Failing to claim the tax reliefs and allowances your business is eligible for could mean that you miss out on valuable financial support.
In addition to those highlighted above, there may be further opportunities to make tax savings in your business and a financial planner can help you identify these.
If you’d like to learn more about how to keep your business finances as tax-efficient as possible, we can help.
To find out more, please get in touch. Email hello@sovereign-ifa.co.uk or call us on 01454 416653.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
Approved by Best Practice IFA Group Ltd on 25/04/2025