Research and Development (R&D) reliefs support companies that work on innovative projects seeking to make an advancement in science and technology and can be claimed for costs specifically relating to those projects including; staff, software and consumables.
There are two different types of Research and Development reliefs, depending on the size of the company.
Small and Medium Sized Enterprises (SMEs) can claim an extra 130% Corporation Tax deduction for their qualifying costs from their taxable profit, as well as the normal 100% deduction, to make a total 230% deduction. This can then translate into a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss.
Large companies can claim a Research and Development Expenditure Credit (RDEC) against their Corporation Tax liability for working on R&D projects, worth 13% of the qualifying R&D expenditure.
Business tax planning is vital. Here at Stephenson Smart we have built up an excellent reputation for progressive tax planning for businesses throughout the whole of the UK. Individuals operating in partnership, sole traders, UK companies and permanent establishments of foreign companies situated in the UK are all liable to pay tax in the UK on their business profits. The regime under which tax is collected differs depending upon the structure through which the business operates.
For example, a limited company will need to file a Self-Assessment tax return form called a CT600, while a partnership will need to file a Self-Assessment partnership return called a SA800. Sole traders and individual partners of partnerships will file Self-Assessment tax returns called SA100.
The responsibility of the correct calculation of business profits contained within each of the Self-Assessment tax returns filed in the UK rests solely with the taxpayer.
Stephenson Smart are able to assist in formulating and submitting calculations of business profits compliant with the latest changes in legislation, making the most of deductions and allowances available to the business. In most cases we can reduce the amount of tax paid and maximise the wealth of the company and/or individuals.
Corporation tax returns need to be filed online in iXBRL format. Filing returns late will result in a penalty and interest on late paid corporation tax will accrue. We are here to ensure that all returns are submitted on time, in the correct format and that all deadlines are met.
Business expenditure of a capital nature is not always tax deductible, but may qualify for capital allowances. There is a wide variety of capital allowances available for capital expenditure depending upon the nature of the capital asset purchased. We will maximise the amount of capital allowances claimed, and the subsequent deduction from taxable profits will reduce your tax liability. Working together with your business we will keep you up to date with tax legislation affecting capital allowances available and ensure that your tax liability is minimised.
We can offer advice specific to you and your needs on an individual basis in relation, but not limited to, the following events:
Advice on Corporation tax payments and their timing, whether in instalments or single transactions.
Calculation and submission of company tax returns in required iXBRL format.
Maximisation of research and development tax credits and administering the repayment of tax losses.
Maximising capital allowances, in some cases obtaining 100% allowances through utilisation of the Annual Investment allowance and Enhanced Capital allowances.
Maximising relief for expenditure on intangible assets and goodwill.
Reconstructions of businesses and groups, including mergers and acquisitions both within the UK and internationally.
Effective loss relief planning including group relief to maximise the potential of your business.
Advice relating to company strategy such as directors remuneration planning and dividend policy.
Call us today to see how Stephenson Smart can help your business.
If you are keen to improve your position in the market by merger, acquisition or disposal Stephenson Smart can help you avoid pitfalls and navigate you through the tricky process.
There are many things to take into consideration when buying a business, including the right price to pay, how much you need to borrow, funding options and which is the most appropriate.
Business Strategy and Support
At Stephenson Smart, we can help you identify purchase targets, assist you in developing business plans and forecasts, use our long-standing relationships to help you in raising finance, carry out financial and taxation due diligence and help in negotiations.
In short, we can give you peace of mind.
You might be considering a Management Buy Out? This is a complicated transaction requiring persistence, expertise and excellent advice and we can advise your management team through every stage
Talk to us about optimising tax and corporate structures, and on advising about an integration plan, or how best to invest the profits.
Stephenson Smart’s business structure planning service can help grow and flourish your business, while maximizing your profit.
Business structure planning is extremely important and determining the right structure for your business depends on many factors. At Stephenson Smart we aim to get a thorough understanding of both your short term needs and your long-term business goals, and recommend the structure that will best deliver your goals now and in the future.
We have particular expertise in the tax treatment of Limited Companies versus unincorporated structures, such as partnerships and sole traders. We can also advise on share structures and if there are different shareholders, consider whether a Shareholders’ Agreement may be beneficial.
The four common forms of business structures are:
The simplest way and only a few formalities attached, the most important of which is informing HM Revenue & Customs when you start trading.
In a partnership, a group of two or more people will come together, pool their talents, clients and business contacts so that, collectively, they can build a more successful business than they would individually. The partners will agree to share the joint profits in pre-determined percentages.
A limited company is a separate legal entity from its owners. It can trade, own assets and incur liabilities in its own right. The ownership of the company is recognised by owning shares in that company. If you work for the company, you are both the owner (shareholder) and an employee of that company. When a company generates profits, they are the company’s property.
Limited liability partnership
A limited liability partnership is legally similar to a company. It is administered like a company in all aspects apart from taxation. In this, it is treated like a partnership. They are particularly suitable for medium and large-sized partnerships.
Are you looking to sell your business? Let us support you every step of the way.
When you decide to sell as business, an experienced accountant is essential. Starting early is the key to successful exit planning and Stephenson Smart can work with you to ensure your goals are fulfilled.
We want business owners to achieve the highest value for their business and keep as much of the proceeds as possible by minimising any taxes.
You may question who you should sell to, how much is the business worth and how you can sell and preserve confidentially. We can provide you with the answers by retaining key management, improving financial performance, increasing profit and reducing your tax exposure.
We know how to conduct an effective sale and at the same time do this in such a way that confidentiality is maintained and access to commercially sensitive data regarding your business is controlled.
Once your business is ready for market, we can help you to identify potential buyers through our network of professional advisers. We can also help you structure the deal and support you during the process of negotiations.
Being subject to a tax investigation from HMRC can be a stressful and worrying experience.
Let us guide you through with our tax investigation service.
What Does A Tax Investigation Involve?
Contrary to most UK law, in a tax investigation you are required to “prove your innocence”. It is not unheard of for an enquiry to last several years and we regularly see Inspectors trawling through not only the business records, but also personal expenditure such as grocery shopping, holidays and car expenses to identify potential discrepancies.
Personal tax clients are not immune either as the tax authorities regularly select individuals for investigation based on its view that they have “the means to pay”.
Regardless of your circumstances, this work is extremely technical and will require significant time by a tax expert in order to resolve the matter with the Inspector.
Disappointingly, HMRC does not consider your costs when conducting its investigations and even a basic tax enquiry can result in thousands of pounds in professional fees.
How Can Stephenson Smart Help?
At Stephenson Smart, we offer our clients an annual subscription to our Tax Investigation Service.
By subscribing to our comprehensive Tax Investigation Service, the cost of full professional representation by our experts will be covered in the event that you are investigated. We will ensure that you do not have to simply concede to the Inspector’s demands and will “fight your corner” without you worrying about the fees.
As a further benefit of the service, you will have unlimited 24/7 access to an expert Business Legal Helpline, which can answer queries relating to Employment Law, Health and Safety matters and commercial issues.
Unfortunately, we cannot protect you from being selected for a tax investigation enquiry, but we can ensure you have experts to help you through it with ease.