Research & Development Tax Credits – Are you eligible?

Research & Development Tax Credits – Are you eligible?

Any new business needs all the tax relief it can get. Which is why it is all the more surprising that for many SMEs, the government’s Research & Development Tax Credits aren’t being more widely utilised.   What activities qualify for Research & Development Tax Credits? HMRC has clear guidelines about qualifying criteria and they are much broader than you might expect: Expenditure on staff (salaries, employer’s NIC and pension contributions all count). Expenditure on subcontractors (including freelancers). Spending on materials and consumables (including heat, light and power that are necessary to, or used up by, the R&D process). Even some types of software expenditure. It’s important to note that your project doesn’t need to succeed to qualify for tax savings. You can reduce your tax by applying for Research & Development tax credits even if you’re not certain if the project is possible, scientifically or technologically. Or if it’s theoretically possible but you’re not sure if you can put it into practice. HMRC calls this ‘resolving uncertainties’ and this qualifies for Research & Development tax credits. In fact, so does enhancing an existing product, process or service. As long as that enhancement requires an Research & Development spend. Another surprising aspect of the tax relief process is that an SME that is undertaking work for a client, for example a software developer creating a bespoke programme or application, can apply for the Research & Development tax credits. Even if they themselves won’t be the final beneficiary of the research process. Research & Development tax savings Research & Development tax credits can be worth as much as 33 pence in every £...
Top tips for selling your business

Top tips for selling your business

Someone told me never get into a business venture unless you know how you are going to get out of it! For most entrepreneurs defining their exit strategy early on, is a critical part of achieving business success. Strategies will differ, but for all there will come a point where they want to exit the company. This normally means passing the business on to a successor, winding it up or selling your business. For many business owners, real value is only achieved when they sell their business. For entrepreneurs, this is their reward for the hard work and dedication put in to building a successful business.  Selling your business – here are our tips on preparing: Timing of the sale Think about when you want to exit the business. You may plan to retire at, say, 60, so work backwards to set yourself a timeline from now to that exit point. Once you have a time line in mind consider carefully the industry you are in. Think about what trends will impact the industry both positively and negatively between now and your exit point. The big influences will be the financial climate and state of the overall economy. It is well known that mergers and acquisitions activity dips in times of recession. Also consider whether a potential buyer would want to keep you on as an employee or a consultant for a period of time. This is becoming more and more common as buyers know that by retaining you the odds of a successful integration are improved. Consider the timescales for the sale itself. Even with motivated buyers and sellers and good legal teams,...
Important Tax Deadlines

Important Tax Deadlines

Important Tax Deadlines We have listed below the key tax deadlines for individuals, self-employed and businesses: The tax year runs from the 6th April – 5th April. Date Information Required 31 July 2016 The second payment on account must be paid to HMRC for tax year 2015/16 05 October 2016 The deadline to let HMRC know that you need to do a self-assessment tax return for tax year 2015/16 31st October 2016 The deadline for submitting paper copies of your tax return for 2015/16 to HMRC and also the deadline for submission if you want HMRC to calculate how much tax you owe 30 December 2016 The deadline for submitting a tax return if you want HMRC to adjust your 2016/17 PAYE code to recover any underpaid tax. The maximum you can repay via your PAYE code is £3000 31 January 2017 Deadline for on line self-assessment submissions. The balance of any outstanding tax and national insurance for 2015/16 must be paid to HMRC. The first on account payment for tax year 2016/17 must be made 5 April 2017 Last Day of Tax Year Limited Companies Taxable profits of up to £1.5 million You must pay your Corporation Tax 9 months and 1 day after the end of your accounting period. Your accounting period is usually your financial year, but you may have 2 accounting periods in the year you set up your company. Taxable profits of over £1.5 million If your taxable profits of more than £1.5 million, you must pay your Corporation Tax in instalments. If you need help managing any of your tax deadlines please get in...

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