- Most UK tax reliefs must be claimed, not applied automatically.
- Each relief has its own deadline, and some cannot be backdated.
- What you can claim depends on what your business did, not its size.
Tax relief in the UK reduces the amount of tax your business pays, and the reliefs a business owner can claim depend far more on what the company did in the year than on how big it is. If you want someone to find the ones you’re missing, a business tax accountant is the fastest route, but this guide gives you the vocabulary first.
Most reliefs are not handed to you. You have to claim them, each has its own deadline, and a few close for good once the window passes.
This page is a map. It covers the main types of tax relief open to a UK Ltd company, points you to the page that handles each one in full, and shows you which situation triggers which claim.
What does tax relief mean (and how is it different from an exemption)?
Tax relief lowers a tax bill, either by reducing the profit you’re taxed on or by giving you a credit against the tax itself. Capital allowances reduce taxable profit. R&D credits give you money back against your Corporation Tax.
Both are relief, they just work at different points in the sum.
An exemption is not the same thing. It removes something from tax entirely, so it never enters the calculation, whereas a relief reduces tax on something that is still, in principle, taxable.
Dividend income inside an ISA is exempt. R&D spend gets relief. The distinction matters because you claim reliefs and you don’t claim most exemptions.
Our tax exemptions guide covers the exemption side.
The rest of this page is about relief, organised by what your business actually did.
Which relief applies to you?
Business owners rarely know the name of the relief they need. They know what happened: they bought a van, they built software, they took investment, they sold up. This table starts from the event.
| What your business did | Relief to look at |
|---|---|
| Bought equipment, machinery or a commercial vehicle | Capital allowances, incl. the the annual investment allowance |
| Paid for day-to-day running costs | allowable limited company expenses |
| Developed a product, process or software | R&D tax credits (merged scheme) |
| Raised investment from individuals | SEIS and EIS |
| Sold the business or your shares | Business Asset Disposal Relief |
| Employed staff and paid employer NI | Employment Allowance |
Read the row that matches your year, then jump to the section below for the detail.
What relief can you claim on money you’ve spent?
Two different mechanisms cover spending, and which one applies depends on whether the cost is a running cost or a capital purchase.
Running costs, the things you consume to trade, come off your profit as allowable expenses. Software subscriptions, professional fees, travel and stock all reduce taxable profit in the year you incur them.
The line between an allowable expense and a personal one is where most small companies slip, so our guide to allowable limited company expenses is worth a read before you file.
Capital purchases, the assets you keep and use, are handled through capital allowances. The main one is the annual investment allowance, which lets you deduct the full cost of qualifying plant and machinery in the year you buy it, up to £1,000,000 per 12-month accounting period.
That limit is now permanent, so there’s no expiry cliff to plan around. Above it, or for assets that don’t qualify for full first-year relief, spending goes into a pool and is written down over time.
The detail sits in our guide to the annual investment allowance.
What relief can you claim on things you’ve developed?
If your company tried to resolve a genuine technical or scientific uncertainty, that work may qualify for R&D tax relief. Since April 2024, most companies claim under the single merged scheme, which gives a 20% above-the-line expenditure credit on qualifying R&D spend.
After Corporation Tax, that’s worth roughly 15% of the spend for a main-rate company. Loss-making SMEs that spend at least 30% of their total costs on R&D can instead claim enhanced support, worth around 27% of qualifying spend.
Here’s the honest part. HMRC now scrutinises R&D claims far harder than it used to, after several years of high error and fraud in the old SME scheme. A thin or speculative claim is a real risk, not a free win, and a rejected claim can pull the rest of your return into an enquiry.
So the value of R&D relief is real, but the bar for a defensible claim has risen. Our walkthrough on claiming R&D tax credits covers what counts as qualifying work and what HMRC now expects to see.
Sleek’s R&D tax credits service handles the claim end to end if you’d rather not file it alone.
What relief is there when someone invests in your company?
When individuals put money into your company, two schemes give them the incentive to do it: the Seed Enterprise Investment Scheme (SEIS) for very early-stage companies, and the Enterprise Investment Scheme (EIS) for slightly later ones. The relief sits with the investor, but the company has to qualify and apply for advance assurance first, which is why it’s your problem too.
There’s also the Venture Capital Trust route, where investors back a fund rather than your company directly. It rarely affects the day-to-day of a small company raising its first round, so most business owners can park it.
This is a deep topic with its own cluster, so this page only flags it. Start with the difference between SEIS and EIS, which is the question most founders ask first.
What relief can you claim when you sell the business?
When you sell a qualifying business or your shares in it, Business Asset Disposal Relief (BADR) can cut the Capital Gains Tax on the sale. For disposals on or after 6 April 2026, BADR applies an 18% CGT rate to qualifying gains, up to a lifetime limit of £1,000,000.
That rate has climbed: 10% until April 2025, then 14%, and now 18%. The relief is less generous than it once was, though still below the standard rates for many sellers.
The lifetime limit is cumulative across every qualifying disposal you ever make, not per sale.
BADR has its own qualifying conditions and a two-year ownership test, and it gets its own page. This hub gives you the headline figures; Business Asset Disposal Relief carries the detail on who qualifies and how to claim.
What relief can you claim when you employ people?
If you pay employer Class 1 National Insurance on at least one member of staff, you can usually claim the Employment Allowance, which reduces your employer NI bill by up to £10,500 for the 2026/27 tax year.
There’s one trap that catches small companies. A single-director company with no other employee paid above the secondary threshold can’t claim it, so a one-person Ltd doesn’t get the allowance until it takes on someone else.
You also have to claim it afresh each tax year through your payroll software; it isn’t carried over automatically. The full eligibility picture is in our Employment Allowance guide.
What personal reliefs can a director claim?
A director is also an individual taxpayer, and a few personal reliefs are worth a mention because they get claimed through Self Assessment rather than the company return. If you work from home under a homeworking arrangement, you may be able to claim tax back for working from home.
Pension contributions, certain professional subscriptions and charitable giving through Gift Aid also attract personal relief.
These sit outside the company’s Corporation Tax position, so they’re easy to overlook when you’re focused on the business. Keep them on a separate mental list, tied to your own tax return.
How does this hub compare to reducing your Corporation Tax bill?
There’s a related question that isn’t strictly about reliefs: how to bring the Corporation Tax bill down overall. That’s broader than any single relief, and it covers timing, salary-versus-dividend mix and pension planning as well as the reliefs on this page.
If that’s what you’re really after, our guide to reducing your corporation tax bill approaches the same money from the action side, rather than the relief-by-relief side used here.
What are the claim deadlines, and what happens if you miss one?
Deadlines are where reliefs get lost, and the windows differ by relief. Some run alongside your Corporation Tax return, some are separate, and a couple can be backdated a few years.
- R&D claims must be made within the amendment window for the relevant Corporation Tax return, and many first-time claimants also have to pre-notify HMRC within six months of their period end.
- Business Asset Disposal Relief must be claimed by the first anniversary of the 31 January following the tax year of the disposal.
- Employment Allowance can be claimed during the year or backdated up to four earlier tax years.
- Capital allowances are claimed on the return for the period of purchase, so mis-timing a large purchase around your year-end can shift the relief into a different year.
The reliefs you can backdate are the exception. Most are tied to a specific return, and once that window closes the relief is gone. That’s the single strongest argument for looking at reliefs during the year rather than at filing.
How Sleek helps with claiming tax relief in the UK
The reason reliefs get missed is rarely that the business didn’t qualify. It’s that nobody looked until the return was already being filed, by which point some of the windows had closed.
Sleek surfaces claimable reliefs through the year, while there’s still time to act on them, rather than reconstructing them at year-end. A qualified accountant reviews what the business has spent and done, flags the reliefs that apply, and handles the claims.
With the Autumn Budget season a regular source of rate changes, having someone track the reliefs as they shift is worth more than an annual catch-up.
Ready to stop leaving tax relief on the table?
FAQs on tax relief
What is the difference between tax relief and a tax exemption?
A relief reduces the tax on something that is still taxable, either by lowering the taxable amount or by giving a credit against the bill. An exemption removes something from tax altogether, so it never enters the calculation. You usually have to claim a relief, whereas most exemptions apply automatically.
Can I claim tax relief for a previous year?
Sometimes, but not always. A few reliefs can be backdated: Employment Allowance can go back up to four tax years, for example. Most, including R&D and capital allowances, are tied to a specific Corporation Tax return, and once that amendment window closes the relief is lost for good.
Do I need an accountant to claim R&D tax credits?
Not legally, but the risk profile has changed. HMRC now checks R&D claims far more closely than it did a few years ago, and a weak claim can trigger an enquiry into the rest of your return. An accountant who prepares the technical narrative and costings to HMRC’s current standard materially reduces that risk.
How much tax relief can a small business claim?
There’s no single figure, because it depends entirely on what the business spent and did. The annual investment allowance alone can cover up to £1,000,000 of qualifying capital spend in a year. The honest answer is that the amount is specific to your accounts, which is exactly why a review is more useful than a headline number.
Does claiming relief increase the chance of an HMRC enquiry?
Claiming a relief you legitimately qualify for does not, on its own, invite scrutiny. R&D is the one area where a weak or poorly evidenced claim genuinely raises risk, because of the compliance history in that scheme. A well-prepared, properly documented claim is not something to be nervous about.
Can a sole trader claim the same reliefs as a limited company?
Some overlap, some don’t. A sole trader can claim capital allowances and allowable expenses and can qualify for BADR on a sale, but they can’t claim the merged-scheme R&D credit in the same way a company does, and Employment Allowance only applies once they employ staff. The relief depends on the structure as well as the activity.
Are tax reliefs applied automatically or do I have to claim them?
Most have to be claimed. Capital allowances, R&D relief, BADR and Employment Allowance all require an active claim, usually on your Corporation Tax return or through payroll. Assuming a relief will apply itself is one of the most common reasons businesses overpay.
