Approved Accounting Tax Reliefs
At Approved Accounting, we regularly advise and assist our clients in planning, structuring and reporting in relation to specialist tax reliefs. We offer practical and commercial advice, underpinned by a wide range of expertise on many of the complex areas of tax often encountered by those running businesses, or investing in, disposing of, inheriting or giving away assets or wealth.
When contemplating significant transactions, or operating in industries where tax incentives are available, it is crucial to have the right advice to ensure opportunities are not missed, and pitfalls are avoided.
It is entirely possible that you could completely miss something fundamental without the right knowledge of the relevant legislation, so whether it is from us or another expert, we would always urge you to take advice.
Table of Contents
Entrepreneurs’ Relief
This is a relief most small business owners are probably aware of, but perhaps not so familiar with the finer details of how it works and who is entitled to claim it (and when). Entrepreneur’s Relief is rumoured to be changing in the March 2020 Budget, but as yet exactly what changes will be made is not known.
As it currently stands, ER has been available for a number of years and can be extremely valuable to anyone selling a business (or in some cases assets used in a business).
Any changes announced in the budget may create opportunities or risks for anyone planning to sell their business, so advice on the best strategy is extremely important.
We regularly help business owners plan for the most tax-efficient disposal or exit from their business, to achieve the best value for their retirement or next venture.
R&D Tax Credits and Patent Box
A huge number of businesses invest in research & development activities and the Government have in place a generous scheme to incentivise companies to innovate.
The key to making this relief work for your business is to plan spending with at least half an eye on how the tax relief works, ensure all relevant spend is identified and recorded to maximise and justify the claim, provide HMRC with a clear and accurate report of the R&D activities undertaken so they can see the merit in your claim, and then to choose the most effective option in terms of taking a tax credit repayment or offsetting against future profits.
Patent Box is a less-used but nonetheless interesting relief giving a lower rate of Corporation Tax on profits earned from patented products/technologies etc. Again, we can help you identify what your business may be entitled to, and then prepare a claim optimised to succeed.
Both of these reliefs can be most effectively utilised if planning begins at an early stage, both in terms of how and where money is invested, and putting in place a careful system to identify and allocate qualifying costs from the start, making subsequent preparation of the claim simpler, and allowing business owners to understand the potential value of their claim as the project unfolds.
At Approved Accounting we can help in all aspects of an R&D project, from inception, through tax credit claims and taking the finished product to market.
Company Reorganisations
Companies often want to restructure their business or assets into (or out of) a group, set up subsidiaries or introduce holding companies. We can help plan the mechanism needed to achieve your aims, carefully consider tax opportunities and potential pitfalls (of which there are many!), obtain HMRC clearance for certain proposed transactions, and then execute the changes once all preparation is in place.
This is a potentially gigantic subject with many potential variables, considerations, objectives and outcomes. An initial discussion with Approved Accounting will help you understand this better, and focus your planning to suit your specific needs before we help you prepare and execute a plan to achieve your goal.
Creative Industries Tax Relief (including Video Games Tax Relief / Theatre Tax Relief)
Similar in some respects to R&D tax credits, special reliefs are available to companies producing games, apps, music, television programming, film etc which pass a ‘cultural test’ to be certified as British.
These reliefs broadly allow businesses to apply a multiplier to qualifying expenditure, in order to claim tax relief on a larger value than that actually invested. In some cases a payable tax credit can be claimed, which can boost cashflow and help to subsidise creative ventures in the development stages.
The reliefs are designed to incentivise and encourage British creative industries to flourish in a competitive global market.
Like R&D tax credits, planning for these reliefs starts much earlier than most people think. Careful identification and allocation of relevant costs from the beginning of a project will make a claim much more straightforward, as will a good understanding at an early stage of what costs will qualify (as this may influence the way money is invested, for example whether expenditure is focused on the UK, or outsourced overseas).
Capital Allowances
This is a huge and often-neglected area of tax for many businesses. The common areas where specialist advice can be valuable are acquiring and disposing of properties, refurbishments, purchasing cars and vans, buying a business (including goodwill), and investing in energy or water saving machinery/equipment.
It is well-known in the accounting industry (but perhaps not so much by businesses themselves) that huge amounts of potential tax allowances are lost when capital expenditure is not properly analysed and broken down, so this is something we regularly work with our clients to avoid!
EIS and SEIS
For companies raising capital by issuing shares, making EIS or SEIS tax reliefs available (and known) to potential investors can make a big difference, both by increasing credibility and reassuring investors that they will receive the tax incentives many will expect when investing in a private company.
From initial advice and preparing ‘advance assurance’ applications through to issuing shares and EIS certificates, we are able to guide your business to ensure you get the most from these schemes, and most importantly attract the investment you’re looking for!
EMI Option Schemes
Attracting and retaining the best people is incredibly important in nearly every business, and an excellent way to do this is by using an incentive scheme, such as Enterprise Management Incentives (EMI). This is a complex topic and it is crucial that it is carried out carefully (for example the company valuation that is required, the terms attached to options given to key employees, and the drafting of the legal documents). Communication with those party to the scheme is very important too.
Having access to the right support and expertise is essential, and at Approved Accounting we have the ideal combination of experience and specialist contacts to deliver the right EMI scheme and outcome for your business.
Loss Reliefs
Sometimes businesses make losses, either because of tough market conditions, wrong decisions, circumstances beyond your control or in the early phases of a business plan, eg the development stage (see R&D reliefs above!).
When a business sustains a loss, whether expected or not, it is important to cushion the impact by utilising that loss in the most effective way. Rules governing loss relief have changed in recent years, so it is important to know the options and carefully choose the right one.
At Approved Accounting we are well equipped to help you do this. We certainly hope it is not necessary, but remember that a loss does not always mean a disaster!
Other Tax Reliefs
There are a number of other tax reliefs available to both businesses and individuals, including Rollover relief, Principal Private Residence Relief, Gift Relief and more.
Approved Accounting can help!
Whatever your circumstances and needs, our team will be able to help you ensure you make informed decisions and plan correctly to ensure you do not miss out on valuable tax planning opportunities.
Call or email us today to discuss your needs, and one of our expert team will be only too happy to help.
