Maximising tax benefits for leisure sector businesses

Running a business in the leisure sector is all about bringing joy and relaxation to your customers. However, when it comes to tax, it’s essential to ensure your financial wellbeing stays on ‘cloud nine’. Our EQ Leisure team provide some tips to help your business maximise any available tax benefits.

Capital Allowances

Remember that you can claim capital allowances on plant and machinery, such as equipment, furniture, and fixtures. The Annual Investment Allowance (AIA) offers 100% tax relief on the first £1 million of qualifying expenditure, providing an excellent opportunity to invest in your business while reducing your tax liability.

In addition to AIA, from 1 April 2023 until 31 March 2026 companies can claim 100% tax relief on new and unused plant and machinery. This new capital allowance is called “full-expensing”, and unlike AIA, there is no limit for qualifying expenditure, allowing you to invest more in the company.

Research and Development (R&D) Tax Credits

Did you know that innovation and development in the leisure sector may qualify for R&D tax credits? Whether you’re designing new interactive experiences or improving existing facilities, these credits can provide a valuable tax relief, helping you to fund future projects.

Employee Benefits / Shares

Reward your hardworking staff with tax-efficient employee benefit schemes. Offering perks like gym memberships, wellness programs, or discounted leisure activities can boost morale and productivity, while also providing tax advantages for your business.

You could take this one step further and consider implementing an employee share scheme. These schemes allow specific employees to acquire a small number of shares in the company, fostering their interest and aligning their interests with the business’s success.

VAT Savings

Ensure you’re aware of the VAT schemes available to the leisure sector, such as the Flat Rate Scheme. This scheme allows you to pay a fixed percentage of your turnover as VAT, potentially reducing your VAT liability.

By considering the tips mentioned above, and seeking professional advice, you can enjoy the rewards of a well-informed tax strategy while focusing on what you do best: creating amazing experiences for your customers.

For more information or advice based on your circumstances, please get in touch with our EQ Leisure specialists by calling one of our offices or emailing leisure@eqaccountants.co.uk.

Alternatively, if you would like to discuss any other tax related issues, you can contact our Taxperts via taxation@eqaccountants.co.uk.