8 smart ways to spend your tax refund as a small business owner

If your business tax refund was really big from the previous year, you might need to check if you’ve been overpaying HMRC. This means the government is using your money instead of using theirs. ​

If you did your own business taxes, hold onto the tax refund and use it to hire a professional to do it for you next year. The accountants not only will be able to help you file tax returns, but also assist you with tax planning and tax minimisation. ​

Read more: How to find the right accountant for your small business​

Investing in new equipment or assets can enhance the efficiency of your business. Therefore, getting a new laptop, buying a new business vehicle, and setting up new tools for business may be worthwhile. Even small upgrades such as getting a new printer, new desks and chairs can help to boost employees’ productivity and morale. ​

It might be worth thinking about hiring an employee if your business is constantly growing and your revenue repeatedly meets what you’ve planned. Labour cost is considered one of the largest expenses when running a business. If your business is booming and you have a decent amount of money from the tax refund, it’s a decision you could move forward with. ​

However, be aware of the employment-related law before making a hiring decision. For instance, what the minimum wage you need to pay is, what benefits they’re entitled to, your auto enrolment and pension requirements and much more. It’s best advised to consult with a legal professional.​

If you’re not ready to commit to hiring a permanent employee, you can hire contractors and freelancers instead so you can focus on the important things to grow your business. ​

Do you have a website for your business? Even though you’re not running a business online, having a website means you’re more accessible to your prospects and customers digitally. If you have a website already, consider upgrading it. Is your website fast enough? Is your website easy to navigate? Is your website easy to use on a mobile device? Do you want to expand your business and start selling online?​

Any business needs marketing to succeed, and it's integral to its success. It's a common misconception that marketing is simply promoting your products and services. Instead, it involves a wide range of aspects from establishing a brand for business, getting competitive insights in your industry, setting a pricing strategy, knowing your customers and maintaining relationships with them. ​

Use the tax refund money for marketing activities such as social media marketing, branding, and search engine optimization (SEO). If you don’t have the skills needed to implement those marketing strategies, consider hiring a marketing professional from Upwork or Fivver. ​

Do you want to adopt something in your business but aren't sure how to go about it? Are you thinking of learning something new that you can use to help your business grow? Business is changing rapidly, and you and your employees need to stay current.​

Take advantage of your tax refund to pay for your own and your employees' education, whether it's a conference in your field or an online course on digital learning platforms such as Udemy and Skillshare. The investment you make in yourself and your employees is ultimately an investment in your business.​

Donating to a UK registered charity or Community Amateur Sports Club (CASC) or making a contribution into your pension are both good ways to use your tax refund as it means tax savings in the current year. ​

If you’re making a donation make sure it’s to a UK registered charity and in the case of a donation or a pension contribution make sure you keep a record of the payment you make. ​

You can find more details about charitable giving if you’re a sole trader or a company on HMRC’s website. You can also read more about tax relief on pension contributions. ​

A small team lunch or bonding activity could be a good way to spend your tax refund. Getting out of the office and taking part in something new and exciting increases your employees’ motivation. It also reminds them that their contributions are appreciated and rewarded. As a result of this motivational boost, they will be more productive and more confident with one another. ​

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant world. ​​

We have a dedicated team of certified accountants and a support team to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.​