Beware of “Rogue” Research & Development Consultants

Beware of “Rogue” Research & Development Consultants:

In recent years HMRC have identified and successfully challenged a number of spurious claims for Research and Development (R&D) tax credit relief made by purported ‘R&D Consultants’.

Many of these claims have been for projects that did not satisfy the criteria for the tax relief and some included overstated expenditure and consequently have been abusing the scheme.

The R&D rules offer legitimate claims generous tax breaks. For a company that is a Small or Medium-sized Entity (SME), qualifying expenditure attracts a tax deduction of 230% of the amount spent which can then be traded in for a tax refund of 14.5% if the company is loss making. Thus £100,000 of qualifying R&D expenditure would potentially result in a tax refund to a loss-making company of £33,350. Most R&D consultants charge a fee based on the amount of the claim.

To qualify for R&D relief, the expenditure must be incurred as part of a specific project to make an advance in science or technology. The project must relate to the company’s trade – either an existing one, or one that the directors intend to start up, based on the results of the R&D.

Further, the company must be able to explain how a project:

  • looked for an advance in science and technology;
  • had to overcome uncertainty;
  • tried to overcome this uncertainty; and
  • could not be easily worked out by a professional in the field.

In summary, R&D claims are often very worthwhile, but a number of strict requirements must first be met. If you are approached by an R&D Consultant or otherwise believe you may be incurring eligible R&D expenditure, please talk to us and we will help you file a compliant claim.

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Do you need a trusted R&D Tax Relief Consultant for your business?

If you want to learn about how we can help you make a claim, or simply want some tax advice you can rely on, then please don’t hesitate to contact us. You can fill out a form below or call us on 0161 962 1855.

How to attract and retain key staff with shares

How to attract and retain key staff with shares:

In the increasingly competitive jobs market, it is important that employers are able to attract and retain talented people to help them grow their business. Within certain sectors, the opportunity to participate in the equity of the organisation that they work for is something that more employees are seeking and those employers that do not offer such opportunities could put themselves at a disadvantage when looking to retain and recruit.

For corporate employers, there are currently four HMRC ‘tax-advantaged’ schemes that provide employees and employers with income tax and National Insurance Contribution (NIC) advantages. The four tax-advantaged schemes are currently:

  • Share Incentive Plan (SIP) and Save As You Earn (SAYE or Sharesave) schemes, which generally need to be made available to all employees after a qualifying period.
  • Probably more appropriate for SMEs are the Company Share Option Plan (CSOP), and the Enterprise Management Incentives (EMI) share option scheme as these are discretionary schemes which allow the management to award options to selected employees and directors that the organisation is looking to incentivise.

Shares acquired under these four schemes are generally free from income tax and NICs if correctly structured. Depending on the scheme used, the employer may also qualify for a corporation tax deduction for the difference between the price paid by the employee for their shares and the market value.

The scheme of first choice, provided the employer company qualifies, is currently the EMI share option scheme as it allows the employee or director to hold options over up to £250,000 of the employing company’s shares based on the market value when the option was granted. The shares, once acquired, potentially qualify for Capital Gains Tax business asset disposal relief when sold and thus the first £1million of gains would be taxed at just 10%.

The acquisition of shares and securities in connection with an employment other than through one of the four schemes outlined above are commonly referred to as ‘unapproved’ or ‘taxed’ schemes. This means that neither the employee nor the employer benefit from any income tax or NIC advantages. This could result in a significant income tax and NIC charge.

Please contact us if you would like to discuss introducing a share incentive scheme to help you attract and retain talented staff.

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Do you want to learn more about how you and your business can attract and retain key staff with shares? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Plastic Packaging Tax update

The Plastic Packaging Tax (PPT) was introduced on 1 April 2022. If you manufacture or import plastic packaging into the UK, you may need to register for PPT, submit a PPT return and pay any tax due.

As the end of the first quarterly accounting period for PPT approaches, HMRC shared some key reminders on completing PPT returns and payments.

  • If you are liable to register or have already registered for PPT, from 1 July 2022 you must submit your PPT return and pay any tax due no later than 29 July 2022.
  • Your PPT return needs to cover plastic packaging your business manufactured or imported into the UK, from when you became liable to 30 June 2022.
  • You must keep accounts and recordsto support the information provided when you complete your quarterly PPT return.
  • Your accounts must show how you have worked out the figures you submit on your PPT return, and your records must show the evidence to support these figures.
  • You must keep your accounts and records for at least 6 years from the end of the accounting period, and record weight in tonnes, kilograms, and grams.
  • You will need to pay any tax due through your online PPT account. You can pay via Direct Debit, BACS, CHAPS, Debit/Corporate credit card or Faster Payments.
  • For a reminder of these steps and all return and payment dates for 2022-23, download the PPT flyer.

See: Plastic Packaging Tax – GOV.UK (www.gov.uk)

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Do you need further support on the Plastic Packaging Tax? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Fraud and scam protection for your business

Fraud and scam protection for your business

Companies House incorporate and dissolve limited companies. They register company information and make it available to the public. They have recently updated their guidance on how to protect your company from fraud and scams and how to report it:

See: Companies House – GOV.UK (www.gov.uk)

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Traineeships – would your business benefit?

The talent shortage continues to place a burden on the economy. As companies struggle to find the talent they need, now is the time to invest in new and more strategic approaches to developing an early talent pipeline. One way of bringing in new talent is through traineeships.

A traineeship is a work-based skills development programme that includes a work placement. There is a free government scheme (outlined below), although you may have your own business costs. Some employers may choose to pay the wages and expenses such as travel and living costs.

The full programme can last from 6 weeks to 1 year, though most traineeships last for between 6 weeks and 12 weeks. Your business needs to be able to offer a work experience placement between 70 to 240 hours. You work with a training provider to design what is included in the programme. Trainees can gain English, maths and work-related qualifications which can lead them on to:

  • an apprenticeship
  • work
  • further education

Employers need to provide:

  • a safe, meaningful and high-quality work experience placement.
  • a minimum of 70 hours of work experience placement throughout the entire traineeship (if the trainee claims benefits, the placement cannot last longer than 240 hours).
  • constructive feedback and advice to the trainee.
  • an interview for an apprenticeship or job in their organisation at the end of the traineeship if one is available.
  • an exit interview at the end of the traineeship with meaningful written feedback if no job is available.

Traineeships can benefit your business by:

  • providing a stepping-stone for your future apprentices.
  • allowing you to test out a new position in your business without committing to full-time hires.
  • attracting a new generation of talent.
  • offering financial incentives of up to £1,000 per trainee.

If you are interested in offering a work placement for a traineeship:

  • Contact the National Apprenticeship Serviceto register your interest and ask for advice and support on traineeships. They can help you set up a traineeship and advertise it on Find a traineeship.
  • Partner with a training providerwho will help you to design a traineeship that will meet your business needs. They will also advertise the work experience placement for you.
  • Agree with the trainee and your training provider about what each of you expects from the traineeship.

See:  Traineeship information for employers – GOV.UK (www.gov.uk)

 

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Does your business offer traineeships? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Tax-efficient finance for your company

HMRC have recently updated their guidance for companies looking to attract investors to buy shares in their company and this blog post outlines tax-efficient finance for your company.

If structured correctly, and if the company qualifies under the Enterprise Investment Scheme (EIS) or the Seed EIS rules, the investors can potentially take advantage of a number of generous tax breaks.

Under the EIS, the company can raise up to £5 million each year, with a maximum of £12 million raised in the company’s lifetime. This also includes amounts received from other venture capital schemes. The company must receive investment under a venture capital scheme within 7 years of its first commercial sale.

The size of the issuing company is crucial as the company and any qualifying subsidiaries must:

  • not have gross assets worth more than £15 million before any shares are issued, and not more than £16 million immediately afterwards.
  • have less than 250 full-time equivalent employees at the time the shares are issued.

The investment must meet the “risk to capital” condition, which means:

  • the company must use the money for growth and development.
  • the investment must be a risk to the investors’ capital.

‘Growth and development’ means the company will use the investment to grow things like its revenue, customer base or number of employees.

There are several other complex scheme rules that need to be followed so that the investors can claim and keep EIS tax reliefs relating to their shares. Tax reliefs will be withheld or withdrawn from the investors if they, and the company, do not follow the rules for at least 3 years after the investment is made.

It is advisable to apply for Advance Assurance from HMRC that the company is an ‘EIS qualifying company’ before the shares are issued.

For more details see: Use the Enterprise Investment Scheme (EIS) to raise money for your company – GOV.UK (www.gov.uk)

Seed EIS (SEIS) is designed to encourage investment in small start-up companies and, like EIS, provides a number of tax breaks for individuals who buy new shares in a company. The company must not have been trading for more than 2 years when the SEIS shares are issued.

Only the first £150,000 of share capital raised by the company qualifies for Seed EIS relief. However, this can form part of a larger share issue with subsequent share issues qualifying for EIS relief up to a £5 million annual limit.

Like EIS, the tax reliefs will be withheld, or withdrawn, from investors if the rules are not followed for at least 3 years after the investment is made.

There is a key condition that the company is an unquoted company carrying on, or preparing to carry out, a qualifying trade at the time that the shares are issued.

Another important condition to qualify under Seed EIS is the company and any of its subsidiaries must:

  • not have gross assets over £200,000 when the shares are issued.
  • not be a member of a partnership.
  • have less than 25 full-time equivalent employees in total when the shares are issued.

Like EIS, it is advisable to apply for Advance Assurance from HMRC that the company is a  qualifying company before the shares are issued. For more details see: Use the Seed Enterprise Investment Scheme to raise money for your company – GOV.UK (www.gov.uk)

Need more information?

We offer a wide range of services which are unique to your business. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Small firms struggle to get finance

Small firms struggle to get finance:

A recent study by the Federation for small businesses (FSB) shows lending to small businesses has hit an all-time low. New findings from the quarterly Small Business Index (SBI) show successful finance applications plummeting to lowest level on record.

The FSB warns that banks “pulling up the drawbridge” to small firms will further stifle economic growth. Fewer than one in ten (9%) small firms applied for finance in Q1 2022, the lowest proportion since SBI records began. The share that saw applications approved (43%) is also at a record low. Of the few firms that did manage to secure finance, four in ten (42%) plan to use credit to manage cashflow, considerably more than the numbers planning to use funds for equipment updates (21%), expansion (19%) or recruitment (4%).

Please talk to us if you need finance – we can help!

See: Lending to small businesses hits all-time low, new study finds, with six in ten impacted by late payment | FSB, The Federation of Small Businesses

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We work with many small firms? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for small firms and start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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The employment allowance – is your business entitled?

The Employment Allowance (EA) is a £5,000 allowance set against employer National Insurance Contributions (NICs) and has to be claimed each tax year by qualifying employers. The EA was increased from £4,000 to £5,000 this tax year to help to soften the blow of the 1.25% increase in employer contributions, now calculated at 15.05%.

If two or more companies or charities are connected with one another, then only one of them may claim the EA.

Employers are not eligible to claim the EA where their employers’ Class 1 National Insurance liabilities in the previous tax year exceeded £100,000.

Another important exclusion from the EA are single director companies where the director is the sole employee of the company.

Need more information?

Do you need further guidance on The Employment Allowance? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Buying a second hand electric car for your business

Buying a second hand electric car for your business:

The shortage of semiconductors has meant long delays in the delivery of new cars. This has caused many company car drivers to choose a second hand car instead, but what are the tax consequences?

Unless the car has zero emissions, the capital allowance rules are the same for new and used cars bought by the business. Plant and machinery capital allowances may be claimed on the purchase price of the car at either 18% or 6%, depending on whether the CO2 emissions for the vehicle are below or above 50g CO2 per km.

 

Where a zero-emission car is acquired by the business, a special 100% first year allowance only applies to new cars. There is however an exception for certain ex-demonstrator cars. HMRC accept a car is unused and not second hand provided it has been driven for a limited number of miles for the purposes of testing, delivery, and test driven by potential purchasers.

When calculating the P11D benefit of company cars the original list price inclusive of extras should be used, not the purchase price. Hence the P11D value for a second hand company car may be significantly higher than the price paid for the vehicle.

Need more information?

Are you considering buying a second hand electric car for your business? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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The Employment Allowance – Don’t forget to claim

The Employment Allowance (EA) is a £5,000 allowance set against employers National Insurance Contributions (NICs) and has to be claimed each tax year if the employer qualifies. This allowance was introduced in 2014/15 and was increased to £5,000 from 2022/23. Employers make a claim for the Employment Allowance through their payroll software. They do this by completing and submitting a Real Time Information – Employer Payment Summary (EPS) to HMRC. The employer must enter “Yes” in the “Employment Allowance Indicator” field of the EPS confirming that they are eligible to claim the allowance.

Eligible employers can claim the Employment Allowance at any time during a tax year. Employers may also claim the Employment Allowance against closed tax years, provided they have not already claimed the allowance for those years. However, claims for closed tax years are limited to the four tax years falling before the current tax year.

The Employment Allowance can be claimed by most employers who pay secondary Class 1 NICs on their employees. This includes:

  • businesses (includes self- employed persons, companies and partnerships who have employees)
  • charities (includes private businesses that have charitable status such as schools, academies, further education colleges and universities)
  • Community Amateur Sports Clubs

If two or more companies are connected with one another, or two or more charities are connected with one another, then only one of those companies/charities may claim the Employment Allowance and they must decide which company/charity claims the allowance.

For recently updated guidance on connected businesses see: –

https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim06560

 

Other Employers Excluded from claiming the Employment Allowance

Employers are not eligible to claim the Employment Allowance where their employers’ Class 1 National Insurance liabilities in the previous tax year exceeded £100,000.

Another important exclusion from EA are single director companies where the director is the sole employee of the company.

Employment Allowance counts towards the total de minimis State Aid you’re allowed to get over a 3 year period. Employers that exceed the de minimis State Aid threshold for their sector (Agriculture products for example 20,000 euros) are also excluded from claiming EA.

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Do you need further support with your payroll?

Our team offers a complete range of payroll services for companies across all sectors, from charities to construction firms.

If you want to learn more about how the team can help, or simply want some start-up advice from a trusted accountant, don’t hesitate to contact us on 0161 962 1855. Alternatively, you can email us using the form below and we will contact you as soon as possible.

Gift aid your donations to help Ukraine

Gift aid your donations to help Ukraine:

For individuals and businesses wanting to donate money to help to support those suffering in Ukraine, there are a number of charities providing humanitarian relief. Ideally this should be done via the Disasters Emergency Committee (DEC) Appeal at

www.dec.org.uk/.

Individual UK taxpayers should make sure to tick the Gift Aid box as that will increase their donation by 25%. It should also be remembered that, like pension contributions, higher and additional rate taxpayers are able to obtain even more tax relief. For example, a £40 donation only costs £30 after higher rate tax relief.

Need more information?

Have you used Gift aid before? We offer a wide range of services which are unique to your business and our expert team of tax advisors get to know you and your business needs. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Tips to help you reduce your business energy bills

Top tips to help your business move towards net zero carbon and reduce your business energy bills.

Businesses need to lead the way in moving towards net zero carbon emissions. There is no quick fix so businesses need to start the journey now and move towards the ultimate goal of net zero, over the next few years. Here are some of the changes that you can implement in your firm.

Switch to a green energy supplier.

Green energy is generated by renewable sources such as wind, hydroelectric or solar. The more businesses that switch to green energy suppliers the quicker the shift away from fossil fuels such as coal or oil will be.

Switch to electric vehicles.

If your business has a fleet of petrol or diesel vehicles, you could switch across to electric-only vehicles. It is also worth noting that company car drivers who choose an electric vehicle also enjoy a reduced benefit-in-kind, for tax purposes. If you deliver products or services to your customers, showing up in an electric vehicle sends a positive message that your firm is an environmentally responsible business.

Reduce business travel.

Reducing business travel will help to reduce your carbon footprint. Air travel is responsible for significant carbon emissions so really challenge yourselves on whether meeting objectives can be met via Zoom or Teams.  Commuting also contributes to carbon emissions. Encouraging your staff to work from home, some of the time, will help to reduce your carbon emissions. Face-to-face meetings are still very important but it is key to get the balance right.

Focus on reducing waste.

Wasted paper, water, energy or raw materials contribute to climate change and also cost money.

You can reduce your energy bills by ensuring that all equipment is turned off at night.

You can also invest in improved insulation and thermal management of your business premises in order to reduce the amount of central heating that is required, particularly in the winter months. You can also encourage staff to print less and reuse or recycle materials, where possible. Embracing new technology such as electronic signatures, etc. can further reduce your reliance on paper.

Switch to lower carbon suppliers.

Research low carbon suppliers and where possible, switch to using them instead of your traditional suppliers. Even small changes such as using a local supplier rather than an overseas firm, will help to reduce the carbon footprint of transporting materials to your business premises. If you only buy from other businesses that are taking action on climate change, you will help to further drive the business community towards our shared goal of net zero carbon. Examples could include banks who offer paperless statements, logistics companies who use electric vans or food companies who recycle and use minimal packaging.

Need more information?

We offer a wide range of services which are unique to your business and can have a chat about how your business can reduce your energy bills. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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What should you do with your savings?

Savings used to be the foundation of good financial management. Putting cash away to deal with emergencies, or to build up a cash sum for anything from a deposit on a first home to our old age was the first step to financial security.

The banks and building societies were only too pleased to help us become savers. They needed our cash to lend out to other customers and they would pay interest to encourage us to leave it on deposit with them, but times have changed. It looks as though the banks don’t want your savings and they are certainly not keen on paying a good rate of interest on them.

The Covid crisis is still not over, but it could be that normal life is becoming a real prospect for the near future. The Bank of England has even raised its own interest rate – the rate that underpins the rates the high street banks use – in an attempt to get inflation under control as the economy bounces back.

But although the base rate increased from 0.1% to 0.75% in recent months, the banks don’t seem too keen on passing on the increase to savers. You might still only earn 0.01% on easy-access deals from the big banks; Barclays, Lloyds (including Halifax), HSBC and NatWest (including Royal Bank of Scotland).

The simple reason is that they are already awash with cash, having benefited from an additional £187 billion savings accumulated since the start of the pandemic and total of around £974 billion sitting in easy-access accounts.

They don’t need to pay you to look after your money and the reserves are so high this is unlikely to change any time soon.

It is possible to earn slightly better rates on your savings with some smaller banks and online providers. Your financial adviser could help you find the best performing accounts, but it might still be difficult to earn more than around 0.75%.

This is of course substantially below the current inflation rate of 6.2%, meaning that your savings will decline in value in real terms.

So what are the alternatives?

With investments, your cash is used to buy something, such as stocks and shares. These may rise and fall in the short-term, but if you invest carefully for a few years, you have an excellent chance of riding out these ups and downs and taking advantage of long-term potential growth in the markets to provide capital growth – or income.

Starting investing can seem a big step, but with help from your financial adviser, investing – in a tax-efficient ISA – can be as easy as saving. Ask them to help you select managed funds that are right for you.

Please note: The information contained in this article is based on general knowledge and does not constitute financial advice or a recommendation to suitable investment strategy, you should seek independent financial advice before embarking on any course of action. Please talk to us and we can recommend an independent adviser.

 

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We are not financial advisors but we know how important savings are to our clients. We offer a wide range of services which are unique to your business and our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Business Support: Help to Grow: Digital Scheme

‘Help to Grow: Digital’ is a UK-wide scheme to help small and medium-sized businesses adopt digital technologies that are proven to increase productivity.

The scheme offers:

  • free, impartial advice and guidance about what digital technology is best suited to your business and how it can boost your business’ performance
  • targeted financial support, if your business is eligible, worth up to £5,000 towards the costs of buying approved digital technologies

The website offers advice, guidance and tools to help businesses explore the huge potential of digital technology to help your business to grow. It aims to help you:

  • identify the digital technology needs of your business
  • make informed decisions about which software products best meet those needs
  • successfully incorporate these products into your business

See: Help to Grow: Digital (learn-to-grow-your-business.service.gov.uk)

Need more information?

Are you interested in the Help to Grow scheme? We offer a wide range of services which are unique to your business. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Ukraine: What can businesses do to help?

Ukraine: What can businesses do to help?

Many want to do their bit to support those who have been forced to flee their homes because of the invasion. Here is how you can help #StandWithUkraine.

Financial donations

If you want to donate money, there are a number of charities providing humanitarian relief in Ukraine.

The UK Government will match public donations to this appeal pound-for-pound up to £25 million.

Donating essential supplies

One of the best ways to help is by donating cash through trusted charities and aid organisations, rather than donating goods. Cash can be transferred quickly to areas where it is needed, and individuals and aid organisations can use it to buy what is most needed. Unsolicited donations of goods, although well-meant, can obstruct supply chains and delay more urgent life-saving assistance from getting through.

Organisations across the UK are gathering essential supplies, such as clothes, first aid and sanitary products. Many charities and community groups will have lists of items they need.

Charities with experience of responding to disasters are best placed to reach victims on the ground.

Apply to be a sponsor

The government will be launching a new sponsorship scheme to make sure that Ukrainians who have been forced to flee their homes have a route to safety.

The scheme will match people, charities, businesses and community groups to Ukrainians who do not have family ties to the UK.

Details of the scheme and how you can apply will be published shortly by the Department for Levelling Up, Housing and Communities.

Extracted from: Ukraine: what you can do to help – GOV.UK (www.gov.uk)

 

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plant and machinery

Consider buying new equipment before your business year end

plant and machinery

Your business year end, not 5 April, is relevant for capital allowances purposes.

If, however you are running a business and making up accounts to 31 March or 5 April you should consider buying plant and machinery to take advantage of the £1 million Annual Investment Allowance (AIA).

The AIA provides a 100% tax write off for new and second hand equipment used in your business. This tax relief extends to fixtures and fittings within business premises such as electrical, water and heating systems. AIA does not apply to motor cars but there is a special 100% tax relief if you buy a new zero-emissions motor car.

If you are running a limited company, remember that new plant and equipment currently qualifies for a 130% tax deduction.

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Are you looking at ways to save tax before your business year end? We offer a wide range of services which are unique to your business and our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Payrolling employees benefits in kind

HMRC are encouraging more employers to payroll employee benefits in kind rather than declaring benefits on the end of year P11d forms.

If employers haven’t already done so they should register online with HMRC on or before 5 April 2022 to payroll employee benefits for the upcoming 2022/23 tax year.
The advantages of payrolling benefits in kind are:

  • employers no longer need to submit P11D and P46(Car) forms to HMRC
  • simpler PAYE codes mean HR teams receive fewer queries from employees regarding tax
  • tax deductions in monthly payroll will be more accurate
  • tax codes for individuals should change less frequently
  • fewer forms for employers to complete at year-end

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We have a dedicated payroll team in-house who take care of all our clients payroll. The team are accessible by phone for all your last minute payroll changes every week. The team are also extremely knowledge on all things pension and do everything surrounding payroll, so you do not need to worry. Our team of payroll specialists have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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The importance of a shareholders agreement

The importance of a shareholders agreement

For limited companies, when it comes to making decisions, Company Law states shareholders who own more than 50% can pass a motion at a company meeting regardless of the views of other shareholders and if shareholder(s) owns more than 75% of the shares they control the company outright and can veto the decisions of all other shareholders.

This may not suit all business situations, especially where you have two or more founders holding equal share capital or a group of owners with varying amounts of capital, some of whom are directors and some who are not, but who are all working together for the company’s success.

A shareholders’ agreement is entered into between all or some of the shareholders in a company. It regulates the relationship between the shareholders, the management of the company, ownership of the shares and the protection of the shareholders. They also govern the way in which the company is run.

A shareholders agreement can help define how a business makes decisions to the benefit of all owners and is recommended where:

  • A small number of owners want to reach collective and fair decisions for the benefit of all
  • Some owners may want to be able to influence decisions that are particularly relevant to them
  • Some shareholders may not be directors and cannot influence operations on a day to day basis

Typically it is seeking to deal with the three “D’s” of death, disability and disagreement. It may also cover a variety of other significant areas, for example, retirement and buy back of shares.

Key areas for any shareholder agreement

This is not a comprehensive list as each situation is different, but it may help you collect the thoughts of all shareholders before you draw up an agreement.

  1. Company details including structure, directors and officers
  2. Purpose and aims of the company
  3. Equity split of shareholders
  4. Parties to the agreement
  5. Shareholders rights, obligations and commitments
  6. Decision making processes on major issues, required voting majorities and day to day operating decisions
  7. Restrictions on the sale of shares
  8. Rights of first refusal and pre-emptive rights to acquire shares on leaving, retirement, death or disability
  9. Death, disability and other retirement compensation payments
  10. Management contracts, director approval and remuneration amounts
  11. Insurance and other protective requirements
  12. Professional advisers and change of professional advisers
  13. Dispute resolution
  14. Changes to and termination of the agreement
  15. Buy out provisions for leaving shareholders
  16. Valuation of shares on changes and valuations of the business

Our view is that a shareholders agreement is an essential document for any limited company and an equitably drafted agreement should provide comfort to all parties to the agreement.

Please talk to us if you need help in planning for an agreement, especially where there are several shareholders, a new company is being formed, a shareholder wants to sell their shares or pass them to their children, someone is nearing retirement, or the company has borrowed money from a shareholder. We can help with share and company valuations and putting the shareholders wishes into an agreement with a local solicitor.

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Do you need help with a shareholders agreement for your limited business. We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Company buy back of shares as an alternative exit

Company buy back of shares as an alternative exit:

Another potential exit for shareholders would be for the company to buy back their shares. This would normally be taxed on the shareholder as a dividend unless certain conditions are satisfied resulting in the payment being taxed as a capital gain.

Clearly CGT treatment is preferable as the rate could be just 10% compared to up to 38.1% on dividends.

Consequently, HMRC need to be satisfied that the share buy-back benefits the company’s trade, and a large cash payment may be difficult to justify if that depletes cash flow. With careful planning it may be possible to stage the buy back over a number of years, but it is recommended that you get advance clearance from HMRC to confirm capital treatment.

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Are you thinking of a Company buy back solution? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Sale of company to employee share ownership trust

Sale of company to employee share ownership trust:

This alternative to the classic management buy-out enables the shareholders of a trading company to sell their shares free of CGT to a trust set up for the benefit of the employees. This has become more popular as an exit route since the lifetime limit for CGT business asset disposal relief (formerly entrepreneurs relief) was reduced from £10 million to just £1 million.

This tax break has recently been used by the owners of a number of well-known companies including Richer Sounds and Riverford Organics, and is similar to the structure in place at John Lewis.

Like business asset disposal relief, the company must be a trading company. The outgoing shareholders are only allowed limited participation in the company following the disposal of their shares. There are a number of other conditions that need to be satisfied. If you are interested in going down this route, contact us to discuss whether it would be suitable for you or your company.

COMPANY BUY BACK OF SHARES AS AN ALTERNATIVE EXIT

Another potential exit for shareholders would be for the company to buy back their shares. This would normally be taxed on the shareholder as a dividend unless certain conditions are satisfied resulting in the payment being taxed as a capital gain.

Clearly CGT treatment is preferable as the rate could be just 10% compared to up to 38.1% on dividends.

Consequently, HMRC need to be satisfied that the share buy-back benefits the company’s trade, and a large cash payment may be difficult to justify if that depletes cash flow. With careful planning it may be possible to stage the buy back over a number of years, but it is recommended that you get advance clearance from HMRC to confirm capital treatment.

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Do you need further guidance on the sale of company to employee share ownership trust? We offer a wide range of services which are unique to your business and can help with this. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

Our fantastic team at A&C Chartered Accountants are here to help.

Passing on your business to the next generation

Passing on your business to the next generation:

If you do not wish to sell your business but are looking to reduce your involvement, you may be considering passing on your business to the next generation, or maybe your management team.

Where you are passing on the business or some of your shareholding, there are generous tax reliefs that facilitate the transfer of ownership without tax charges arising. These tax reliefs are currently available on the transfer of a trading business although it may also be possible to pass on an interest in an investment business with careful planning. We can of course discuss your plans with you to ensure that you are able to take advantage of all available tax reliefs.

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Are you passing on your business to the next generation? We offer a wide range of services to help you with this. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Planning to sell your business in 2022?

Planning to sell your business in 2022?

Now that the economy is starting to recover, this could be a good time to think about selling your business. Remember that under the current capital gains rules, the first £1 million of an individual’s gains potentially qualify for a 10% rate of tax, provided business asset disposal relief applies. We can check whether or not you and other business owners qualify for this generous relief. Note that the £1 million limit applies to all disposals during an individual’s lifetime.

If your business is worth more than £1 million, you might want to consider the transfer of shares to other family members, although they will need to satisfy the conditions for business asset disposal relief for at least 2 years prior to any sale.

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Are you planning to sell your business in 2022? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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Selling your business to your management team?

If your family are not interested in taking over your business, have you considered selling the business to your management team?

In a typical management buy- out the existing management would set up a new company which would then raise finance to acquire your current business, so this is essentially the same as a sale to a third party, except the management team will know quite a bit about your business already. They would still nevertheless need to carry out due diligence and require you to provide warranties and indemnities as in a third party sale.

An increasingly popular alternative to the classic management buy-out referred to above would be to sell your company to an Employee Share Ownership Trust (ESOT).

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Have you considered selling the business to your management team? Our team can help and we offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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New Year, New Opportunities – Freeports

New Year, New Opportunities – Freeports

In his Spring 2021 Budget the Chancellor announced that there would be 8 “Freeports” in England with generous tax breaks to encourage businesses to set up and invest in those areas. The devolved governments will also be announcing locations in Scotland, Wales and Northern Ireland in due course.

The proposed locations of the freeports can be found here: https://www.gov.uk/guidance/freeports#where-are-they-located

SUMMARY OF FREEPORT TAX ADVANTAGES

The main tax and customs duty advantages of locating in a designated freeport area are as follows:-

  • SDLT exemption on the purchase of land and buildings in the area
  • 10 year write off of the cost of constructing or renovating commercial property
  • Enhanced capital allowances for investment in plant and machinery
  • Exemption from employers NICs for certain staff working in the freeport area
  • Special VAT and Customs Duty rules

7 of the 8 freeport areas are on the coast and thus ideal locations for businesses importing goods into the UK. There is however no restriction on the nature of business carried out within the designated freeport area.

The eighth English freeport is around East Midlands Airport which would be an ideal place to locate a distribution centre, being half way up the M1 motorway.

Please contact us for more details on the tax breaks for locating in one of the designated freeport areas.

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Do you need further guidance with freeports? We offer a wide range of services which are unique to your business. Our team of chartered accountants have a wealth of experience in a broad range of sectors, from construction and property to the charity sector. Our team work hard to ensure they create smart and effective tax-efficient solutions for start-ups to optimise growth and help them succeed. If you want to learn more about how the team can help or simply want some start-up advice from a trusted accountant do hesitate to contact us. For more information please do hesitate to contact us on 0161 962 1855. Alternatively you can email us using the form below and we will contact you as soon as possible.

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