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Do not miss out on R&D tax relief claims

Wed, 16 Feb 2011 18:08:45 +0000

The definition of R&D expenditure extends beyond the traditional areas of research. We can help you indentify any qualifying activities to ensure you don’t miss out. Most companies who try to remain competitive engage in some form of R&D. You may be surprised to learn of some of the expenditure which can attract a 175% tax deduction.

The biggest element of an R&D claim is usually staff costs which can include directors’ remuneration. Other expenditure typically includes costs for software, power, subcontracted R&D and consultancy. We can help you identify and evidence qualifying costs in order to bring a successful cash generative claim.

H M Revenue & Customs have specialist units which deal with R&D tax relief claims. We have developed a good working relationship with the R&D specialists within HMRC and have generally found that claims are handled quickly and efficiently enabling us to secure cash flow benefits for our client’s quickly.

Call us to find out more.

Could HMRC Time to pay scheme help you?

Wed, 16 Feb 2011 18:07:44 +0000

The process is reasonably straightforward for tax liabilities of less than £100,000. In these cases terms are usually agreed by HMRC fairly quickly over the telephone. For liabilities in excess of £100,000 decisions are generally referred to the business’s Local Tax Office for clearance. The HMRC Business Payment Support Service Line number is 0845 302 1435.

In respect of VAT we have been successfully negotiating ‘time to pay’ arrangements on behalf of clients at 0% interest without surcharge or penalty. Typically, other taxes are being deferred without surcharge or penalty, however, interest is being incurred, at the current official rate of 2.5%.

If you’re business is having genuine difficulties and is operating on finance then it may make commercial sense for the business to arrange a ‘time to pay’ agreement with HMRC in preference to using money that incurs higher interest costs elsewhere.

Care is needed, however, as arrangements must only be made where a genuine need can be demonstrated. We would recommend you discuss your intentions with us before HMRC are contacted.

Call us to find out more.

Can your business cash in on old bangers?

Wed, 16 Feb 2011 18:02:24 +0000

The Government’s vehicle scrappage scheme is up and running and most people are aware of the opportunity to cash in on a £2000 discount when trading in a car aged 10 years or more for a new one.

You may not be aware that your business or company can claim in exactly the same way. No distinction has been made between commercial or private buyers, it is the registered keeper (whether an individual, partnership or limited company) who is eligible to apply. The scheme also applies to vans (up to 3500kg in weight) and there is no limit to the number of vehicles that can be purchased per individual or business.

The scheme can be used to achieve a very tax efficient investment. The part exchange of a qualifying ‘old’ van or car for a new van could achieve the scheme discount of £2000 on the price; a full repayment of Vat incurred and enhanced tax allowances of up to 100%. In addition HMRC have confirmed to us that the scrapped vehicle will be treated in tax terms as being disposed for £nil as opposed to £2000, therefore no tax charge arises on the ‘scrappage’ of the old vehicle.

What’s the catch?

Apart from the obvious cost of investing in a new vehicle there are conditions as follows:

Your old vehicle must:

· Be a car or van weighing up to 3,500 kilograms;

· Have been registered in the United Kingdom on or before 31 August 1999

· Be registered with the DVLA in your name;

· Have been under your ownership continuously for the past 12 calendar months;

· Have a current MOT

· Be clear of any financial arrangements.

Your new vehicle must:

· Be a car or van weighing up to 3,500 kilograms;

· Be first registered in the United Kingdom on or after mid May 2009;

· Be declared new at first registration in the United Kingdom with no former keepers;

Funds are limited to £300m for the scheme. It will end the sooner of 28 February 2010 or when these funds are exhausted. The Scrappage Scheme is voluntary for manufacturers and dealers. If the manufacturer enrolls on the scheme it will apply to all the manufacturer’s models and not just selected ones.Please contact us to obtain advice specific to your circumstances.

New Companies Act 2006 provisions: Protect your privacy

Wed, 16 Feb 2011 18:01:43 +0000

From the 1 October 2009 the final provisions of the new Companies Act 2006 become effective. One key benefit is that the Act provides company directors the opportunity to provide a service address rather than their personal residential address for the public register.

If you are a company director this provides you with the opportunity to protect your privacy and reduce your exposure to ID fraud from 1 October 2009 by removing your residential address from the public domain. The service and residential address still need to be supplied to Companies House, however, the residential address will remain confidential to the company, the Registrar and certain specified public bodies.

You can choose any address (as long as it is not a PO Box or DX number) as the service address including your company's registered office. We would recommend that the registered office address is used where the registered office is not also the company's trading address. Where the registered office is also the trading address we would recommend an alternative service address such as your accountant or solicitor. The address must be where documents can be delivered and an acknowledgement of receipt provided if required.

The legislation also paves the way for future regulations which provide for removing the requirement for details of shareholders so that shareholders addresses are no longer disclosed. Although not yet in force this is another important development that you can take advantage of to protect your privacy and reduce your exposure to ID fraud.

Other Changes from 1 October 2009:

There are several other changes effective from 1 October 2009:

- The Registrar at Companies House will have greater powers relating to the delivery of information
- There are a number of changes to the company incorporation process
- There will be changes to all Companies House forms
- There are changes to provisions for changing company names and Articles of association
- The rules on company names will be stricter
- Public limited companies will be able to apply for voluntary dissolution
- A statement of capital must be made by all companies as part of any annual return filing
- There are changes to arrangements for inspecting a company's registers

Our company secretarial services will be fully updated with effect from 1 October 2009 including an upgrade to our online filing system to ensure our clients compliance with the Companies Act 2006. Please contact us for more information.

We already provide solutions which can help you protect your privacy in respect of shareholdings in private company's - please contact us to find out how we can help you.

Budget 2010 : What was in it for your business?

Wed, 23 Jun 2010 18:00:09 +0000

The ‘headline’ rates of corporation tax remain the same as last year, the small company rate will stay at 21% and the main rate will remain at 28% for 2010/11.

If you’re investing in plant and machinery…

The annual investment allowance has been doubled from £50,000 to £100,000. This means that 100% First Year Allowance is available for expenditure incurred on plant and machinery on or after 1 April 2010 for company’s of any size and 6 April 2010 for sole traders and partnerships.

If you’re a small business occupying property…

Small businesses occupying properties with rateable values of up to £6,000 will pay no business rates for one year from October. In addition small businesses occupying premises with rateable values up to £12,000 will benefit from taper relief.

If the recession is affecting your business’s cash flow…

It is welcome news that the Business Payments Support Service will continue for the foreseeable future. This is one of the Government’s support success stories. It is good news for business that in this year’s Budget the Chancellor extended financial support for the term of the next parliament.

We are already working hard on developing planning strategies to help you following the Budget announcement. The content of this briefing is intended to highlight a few topical issues arising from the Budget 2010. You should not act upon this information without taking proper professional advice after a thorough examination of your situation. It should not be regarded as a basis for ascertaining liability to tax or determining investment strategy in specific circumstances.

Budget 2010 : What was in it for you?

Thu, 17 Jun 2010 17:58:24 +0000

Income tax allowances and thresholds for 2010/11 have been frozen at 2009/10 levels (unless your income exceeds £100,000) and broadly speaking rates of National Insurance will remain the same.

If you’re a high earner..

Income tax rate of 50% will apply to individuals earning in excess of £150,000 from April 2010. Personal tax allowances for individuals earning in excess of £100,000 from April 2010 are reduced on a sliding scale. There will be no personal allowance for individuals earning in excess of £112,950. You may also be affected by a reduction in the relief available on pensions; the tax relief is reduced on a sliding scale. Additional legislation was introduced in Finance Act 2009 to prevent relief for higher pension payments being claimed now.

If you’re an investor..

You will be pleased with the fact that the capital gains tax rate remains at 18%. For entrepreneurs the news is even better as those that qualify for Entrepreneurs Relief will now be taxed 10% on the first £2m of capital gain.

If you’re a saver..

The ISA limits are to be increased from £7,200 to £10,200, with the cash element also increasing from £3,600 to £5,100. This change was implemented for individuals over 50 for 2009/10, and now applies for everyone else from April 2010.

5 April deadline looms for tax plans

Fri, 02 Apr 2010 18:06:08 +0000

From an income tax point of view you should consider using any remaining tax free personal allowances and lower rate tax bandings to maximise your tax position. The basic personal allowance for 2008/09 is £6,035; and for those aged over 65 this can be in excess of £9,030.

Investors should be looking at using Individual Savings Accounts (ISA's) tax breaks before the 5 April deadline. Individuals can put up to £7,200 into ISA's per tax year, of which £3,600 can go into a cash ISA. Although interest rates are low cash ISA's are very attractive because interest is tax free. Higher rate taxpayers can significantly improve their returns as an ISA paying 3.5% interest is equivalent to a normal savings account earning 5.8%.

For Capital Gains in 2008/09 the Annual Exemption is £9,600 which means that there is no tax to pay on the first £9,600 of gains made. If you have potential gains in 2008/09 you may want to look at disposing of the asset before 5 April in order to trigger the gain to use your annual allowance. Correspondingly if you have already made gains in 2008/09 but have assets with potential losses you may wish to dispose of the assets before 5 April so that you can offset the losses against your gains.

Those with surplus assets and dependents should consider using remaining Inheritance Tax (IHT) tax free allowances. Individuals can make gifts of up to £3,000 per tax year completely free of IHT - regardless of whether they survive the seven years following the gift. In addition if last year's allowance was not used a gift of £6,000 may be made completely free from IHT as long as it is made before 5 April.

Company owners may consider the extraction from or retention of monies in their business prior to 5 April in order to obtain a tax advantage. Consideration should be given to dividend policy and remuneration planning. Particular care should be taken in this area and we would urge you to take advice before action is taken as a number of taxes and issues, both business and personal, are involved.

Entrepreneurs and private company investors should consider the timing of their investments in Venture Capital Trusts (VCT's) and Enterprise Investment Schemes (EIS's). Income Tax relief may be available on investments, at 30% and 20% respectively.You should consider whether your tax position may be enhanced by making an investment prior to 5 April. EIS investments can also enable the deferment of Capital Gains made prior. Timing is everything and the looming 5 April deadline may be an important one.

For individuals that are not domiciled in the UK for tax purposes there are various action points to consider prior to the 5 April deadline. The planning and timing of remittances of income or gains to the UK from overseas is particularly important.

This is not an exhaustive list of all the issues that should be considered prior to 5 April. It is intended to prompt consideration of some of the basic tax planning points.

Please contact us for specific advice.

Budget 2009 : What was in it for you ?

Thu, 25 Jun 2009 18:04:38 +0000

In his 2009 budget speech on 22nd April 2009, the Chancellor did not disappoint by introducing yet more complex provisions to an already excessively complex tax system. In the House of Commons the speech generated all the atmosphere found in the cockpit of a pilotless glider! But what's in it for you?

If you're investing in plant & machinery:

One of the headline grabbing changes for business was the surprise re-introduction of enhanced tax breaks for capital investments in plant & machinery. Company's investing in qualifying plant & machinery from 1 April 2009 (and unincorporated businesses from 6 April 2009) will be able to claim 40% First Year Allowances on the total expenditure. The measure is temporary and is expected to be available for 12 months from April 2009.

In addition, revisions will be made to the energy efficient scheme list to include a 100% enhanced capital allowance for expenditure on plant and machinery that is energy and water efficient.

If your business has made trading losses:

If your business has made or is likely to make trading losses, the Budget extends the period that losses can be set back against previous years profits to 3 years. This change applies to company's and unincorporated businesses such as sole traders, partnerships and LLP's. There are some restrictions, however, the rules do still provide your business with more opportunity to obtain tax repayments from previously paid tax. If your business has made or is expecting to make losses you should contact us so that we can help you maximise any available tax repayment and secure some positive cash flow as soon as possible.

If your business provides company cars:

The Budget has confirmed the proposed changes to the capital allowances regime for company cars. The current expensive car regime has been replaced by a new regime with an environmental focus. From 1 April 2009, cars below a certain CO2 emission limit will form part of the general plant and machinery capital allowances and others will attract a 10% allowance. The £80,000 price cap that currently applies when calculating the cash equivalent of the car benefit will be abolished – in effect the list price for tax purposes will now be unlimited, making very expensive company cars less tax and NIC efficient.

If you're an employer:

New measures were introduced in the Budget specifically applying penalties for the first time in relation to employers who are late in making PAYE (Pay as you earn) and NIC's (national insurance contributions) in respect of payroll. Penalties for the late payment of taxes and deductions collected through the PAYE system will depend on the number of defaults in any 12 month period, starting with no penalty for the first default. A second late payment and any subsequent failures in the default period will attract a penalty of two percent rising to five percent of the unpaid taxes. Further penalties of five percent will be imposed for any amounts of tax still unpaid at six and 12 months. Further penalty measures have also been introduced in respect of the CIS (construction industry scheme).

We are already working hard on developing planning strategies to help you following the Budget announcement. The content of this briefing is intended to highlight a few topical issues arising from the Budget 2009. You should not act upon this information without taking proper professional advice after a thorough examination of your situation. It should not be regarded as a basis for ascertaining liability to tax or determining investment strategy in specific circumstances.

Budget 2009 : What was in it for your business?

Fri, 12 Jun 2009 18:04:21 +0000

If you're investing in plant & machinery:

In addition, revisions will be made to the energy efficient scheme list to include a 100% enhanced capital allowance for expenditure on plant and machinery that is energy and water efficient.

If your business has made trading losses:

If your business provides company cars:

If you're an employer:

We are already working hard on developing planning strategies to help you following the Budget announcement. The content of this briefing is intended to highlight a few topical issues arising from the Budget 2009. You should not act upon this information without taking proper professional advice after a thorough examination of your situation. It should not be regarded as a basis for ascertaining liability to tax or determining investment strategy in specific circumstances.