SURE Initiative - Starting a New Company? You Could Be Due a Tax Refund
In May 2015, the government announced the Start-Up Refunds for Entrepreneurs (SURE) initiative, a new scheme whereby if you start your own business through a company, you will be able to claim back 41% of the tax that you paid in the previous 6 years.
All income tax paid in those 6 years can be claimed as a refund under the SURE scheme, subject to the overall limit of 41% of the total investment in the business.
There are however some conditions to the scheme you have to comply with, as follows:
* You must establish a new company * The new company must engage in a qualifying trade * You must invest the refund in the new company through the purchase of new shares * You must take up full-time employment in the new company, either as a director or as an employee * You must have had mainly PAYE income in the previous 6 years (this includes people in receipt of PAYE income through employment, an unemployed person, a person recently made redundant or a retired person).
There is a useful on-line calculator available here in which you can estimate the potential SURE refund available to you. To use the calculator, all you will need is your likely investment amount and the details of both your income and tax paid for each of the preceding 6 years (you can get this information from your P60 or P21 balancing statement).
This is a very welcome boost to a person starting their own business, particularly where sourcing start-up funds through either a bank or an investor(s) can often be an arduous, drawn out and difficult process.
But does this announcement signal a sea change in the mindset of the government towards small business and maybe a step to finally recognising the importance of Small Business to the economy or is it just an announcement by a government that has with one eye firmly fixed on 2016? Only time, and more welcome initiatives like this, will tell however! Small Business, and the Self Employed in particular, have long been a sector of the economy taken for granted and overtaxed by successive governments only then to be forgotten about when the business for whatever reason fails or doesn’t work out.
I hope you find the above interesting and of course if you have any questions or require further information, you can contact me.
Timothy Kelliher Chartered Accountant