You only have to see some of the recent announcements such as:

– Phasing out new Diesel and Petrol Cars by 2030

– Shell installing a network of 50,000 of accessible on-street and on forecourt EV charging points across the UK, through its recently acquired Ubitricity business.

– The Highways agency using Graphene in asphalt to enhance the durability of road surfaces and extending the periods of time between maintenance.

It’s the little things

We’ve been trying to work out how to make our tax consultancy more “Sustainable”, but its difficult, we work from a serviced office so have little impact on the choices of services. We come to work and travelled to our clients through a mixture of train and car, we could use cars less, but they are convenient, but we haven’t really been visiting clients since lockdown ceased. Instead, we have made use of services like Zoom and MS Teams to keep interacting with our customers, so perhaps in a way, we have stumbled into being slightly more sustainable.

We will continue this into the future and mix in a handful of client visits as we move forward. It’s difficult not being on a client’s premises, certainly when it comes to the engineering and manufacturing sectors that we support with Research and Development Tax Credit claims.

Being on site gives you a feel for what’s going on, especially if you have a curious nature, which we tend to have, because of what we do. When we ask questions based on what we see, hear and feel, generally speaking the potential to claim and also the value of the claim increases.

Sustainability doesn’t have to be expensive.  It doesn’t have to be huge grand gestures, it will be the sum of all of the little changes that we make in both our personal lives and in business that will be greater than the whole.

The bigger projects can get support

However, if you are looking for that one big project, that world beating new piece of technology, or an idea to revolutionise the agricultural industry or the renewables industry, or to reduce waste, then it might be expensive, it might be time consuming, but there are plenty of ways that you can find support from government.

There are a number of competitive grant schemes that have sustainable elements at their core, you only have to check out UK Research and Innovation  (www.ukri.org) where there are over 100 opportunities for business funding, granted not all of them are focused on sustainability but there will be a significant number.

Then there’s research and development tax relief. If you are lucky enough to have successfully received a grant, you may be somewhat surprised to hear that you could also benefit from tax relief for spending the grant money. You can claim under the RDEC scheme, whether you are a large company or an SME for the grant funded projects, which for money spent since 1 April 2020 will generate either a tax rebate or a cash injection of up to 10.53% of the eligible costs.

If you are a small company and you either didn’t apply for a grant or weren’t successful in your application, but have decided to go it alone regardless then you could in fact be in line for an even greater cash injection for a loss making company of up to 33.35% of your eligible spend, if you are profitable it will reduce your tax liability by up to 24.7% of the eligible spend.

The last way the government can help is through Patent Box. If your new product is so ground-breaking that you are looking to Patent it and are successful in being granted a patent, you could reduce your tax bill further, because of the profits being generated on the sale of the items being taxed at a reduced rate of 10%.

As we move towards the end of 2021 and in to 2022, we can help you with all of these aspects of funding for innovation, as we have grown our business relationships to include an innovation grants funding expert to our existing family of services, which already focus on R&D and Patent Box.

In the meantime, one of the things that we have already been doing is offering a reduction in our fees for companies that are developing green technology, sustainable agriculture and renewables. We’ve worked with a few companies this year and are looking to find and support more businesses that are working in these high value areas that will help all of us to be a little more sustainable in our lives.

If you would like to have a chat to determine whether you have an eligible project, sustainable or not then you can book a 15 minute call with our director, Simon Bulteel. Get in touch today.

The post Can you make innovation in sustainability financially viable in the short term? appeared first on Cooden Tax Consulting.

Tensei think it is ‘Smart to use what is wasted and not waste what is precious’.

This nugget of a company was founded by Annabelle Cox, previously co-founder of SCIN, the UK’s largest materials library and resource based in London, Clerkenwell.  Curiosity and Systemic Design has fuelled her relationship with business.  Early 2013 and on the back of an exhibition at SCIN showcasing materials development inspired by the farm, she realised that there was potentially an opportunity to create technical materials, notably papers, from straw.  Historically, straw has been used in Indo-China as a substitute for wood pulp. Adoption in the West though is another story and for good reason, there was plenty of forestry.

Fast forward to 2016 and change rides wildly into town as the perfect storm of shifting societal habits, resource constraint, climate change and plastic ‘non gratis’ colluded to Tensei’s benefit. We needed and need to look to pastures new and ironically, some answers lie in the field.

So why was this so interesting for Tensei? In a nutshell, Tensei researches, develops, and produces smart and or useful pulps, materials and products using biological systems, notably crop waste, biowaste and grasses.

This may sound simple and to an extent it is but the ‘to do’ list to make change happen for comfortable global adoption of these fibres is extensive: consistency, quality, supply, accreditation are some of the interesting headers.

Whilst Tensei are working hard to supply some of the answers, in part through a new technology platform to deliver on those requirements for adoption, they appreciate that for any innovation to succeed, it needs to work within current operating systems first before it can stretch its legs. Tensei’s approach therefore is to gently tickle Industry into making the change. For example, Tensei specifically work using commercially available pulps at this stage – wheat, bagasse, hemp, jute, bamboo, rice straw, cotton linters, flax but in the future, this will extend to a broader base of fibre from multiple bio waste streams.

To put it into greater context, the paper and board pulp market is currently about 431million tonnes of which non-wood is roughly 3% of the market – 12 million tonnes. ( source FAO)  Yet there is roughly 2.5 billion tonnes of uncollected straw estimated to be available.

A scalable, financially profitable business is of course important but the endemic spirit driving this is the need for the global economy to see the opportunity afforded by this raw material source. It is yet to become the ‘Go to’ material of choice but it waits quietly in the wings. Tensei is one of the drivers towards mainstream adoption of straw or crop waste as a viable, albeit different, resource for multiple industries from packaging to bio composites, textiles to chemicals.

Tensei is diaphanous:  part synthetic biology, part tech and full on environmental in its positioning as a company and ethos.

It sits between ‘Impactful’ and tech. Almost like a person yearning for mindfulness but with formula 1 elbow tweaking.  Like many emerging companies, Tensei is part of the global bioeconomy and according to Forbes:

“The global bioeconomy is about to take off as manufacturers choose biology as the method of choice to efficiently produce high-performance, sustainable products. Synthetic biology is at leading edge of this $4 trillion gold rush”

Part of Tensei’s offering is product based, this helps it to embark on its own R&D projects and demonstrate how it can also commercialise innovation for its customers. To date, Tensei has developed its own papers for food and drink: absorbent papers for uses ranging from pads in soft fruit punnets, bakery and in the future meat, fish and poultry, takeaways. and new recyclable coated laminate papers for a range of products from straws to crisp bags.

So, for those that want to future proof and deliver a genuinely impactful set of product solutions Tensei would love to help solve problems ranging from alternative solutions to plastic to what to do to valorise biowaste. The crop harvest is no longer just about food, it may even one day form part of a satellite construct orbiting earth. For more information on Tensei, visit www.tensei.co.uk.

Tensei have so far been able to claim around £30k for their historic R&D efforts and we are currently preparing claims for more, which will no doubt be used to fund future R&D that this innovative business, with an alternative idea, still has to undertake to widen their product portfolio.

Arrange a “Find Out in Fifteen” discovery session to determine your eligibility to claim. Book a call now!

The post Hello world – meet Tensei appeared first on Cooden Tax Consulting.

Mmmm, well, that’s not really what’s happened over the last 15 months with Covid and all that we have endured as a nation, and to a certain extent as one humanity. When you throw the ongoing impacts of Brexit into the mix as well, I suppose there is some belief at least that the latter part of the headline might actually be true!

However, here in the UK things are beginning to look up. The vaccine roll out continues at pace, being in the 45-49 year old category, I’ve just booked my first jab, I think I may well have had it by the time you get round to reading this! We’re able to go and have a beverage in a pub garden, we can meet outside as either two households or six people and we can finally have our hair cut. The last time my barnet was trimmed was the start of November, just before lockdown 2! It’s a mess and it’s got a lot more grey in it.

And yet despite all of this in our private lives, for many in the food and drink industry your working lives may have changed a bit but the demand for products and services has been maintained, although for some of you, that may be in a slightly different format.

With change comes innovation, and in the UK and a few other countries around the world, with innovation comes tax relief. Now not all innovation is worthy of tax relief, but there are significant elements that do reach the criteria for tax relief.

Developing new products, processes, materials and devices, or significantly improving existing ones could all qualify. The bar requires that a competent professional operating in the field couldn’t have readily deduced the solution, or a group of people having a discussion couldn’t come up with it quickly. Ultimately if it required significant thinking time, then there is some scope to claiming.

It could be that during the pandemic, shortages existed in the supply chain and yet demand for your product continued. If you had to significantly adapt a recipe, by going beyond an established substitution of one product for another and you had to experiment to ensure that there were no discernible differences between the end products, and this required, research and batch trials, you could have a claim.

It’s not just in food and beverage production that there is scope to claim, it’s the development of machinery, processing equipment, cookers, dryers. How you grow the crops and develop new varietals that may be more hardy or resilient to pests, need less fertiliser or treatment during the year.

It can be a real pain trying to establish for yourself whether you think what you have done meets the criteria. There are pages and pages of notes on HMRC’s website, if you’ve never looked, if I’ve piqued your interest you can go to HMRC Internal Manuals or just search for “CIRD80000” in Google or Bing.

Or you could just be brave and say, I don’t need to know that level of detail for myself, I just want to talk to someone about our project or projects, that does know that level of detail because that’s what they do. Well, you’re in the right place, right now.

Get in touch today and book a “Find out in 15 minutes” discovery call with me, there’s no obligation, if you just want to find out if you might be able to claim and go and do it for yourself, be my guest. Good luck! Speak Soon!

The post What innovation or opportunities have arisen in your business? appeared first on Cooden Tax Consulting.

As we have started the new year with encouraging news about vaccines and hopefully a more positive outlook on the year ahead than perhaps we might have had six months ago, when many business owners thoughts were more focused on survival, it’s important to refocus on those sustainability goals that many businesses have.

We’ve been trying to work out how to make our tax consultancy more “Sustainable”, but its difficult, we work from a serviced office so have little impact on the choices of services. We come to work and travelled to our clients through a mixture of train and car, we could use cars less, but they are convenient but haven’t done so since lockdown. Since the onset of the first lockdown we have made use of services like Zoom and MS Teams to keep interacting with our customers.

So perhaps in a way, we have stumbled into being slightly more sustainable, will we maintain this as we come out of the other side of Covid? Who knows? It’s difficult not being on a client’s premises, certainly when it comes to the engineering and manufacturing sectors that we support with Research and Development Tax Credit claims, being on site gives you a feel for what’s going on, especially if you have a curious nature which we tend to have, because of what we do. When we ask questions based on what we see, hear and feel, generally speaking the potential to claim increases.

Sustainability doesn’t have to be expensive, it doesn’t have to be huge grand gestures, it will be the sum of all of the little changes that we make in both our personal lives and in business that will be greater than the whole.

That being said, if in business you are looking for that one big project, that world beating new piece of technology, or an idea to revolutionise the agricultural industry or the renewables industry, or to reduce waste, then it might be expensive, it might be time consuming, but there are plenty of ways that you can find support from government.

Business funding opportunities

There are a number of competitive grant schemes that have these sustainable elements at the core, you only have to check out UK Research and Innovation  (www.ukri.org) where there are over 100 opportunities for business funding. Granted not all of them are focused on sustainability but there will be a significant number, particularly with the advent of the government’s Industrial Strategy and its continuing signals that in the new post-Brexit world, we won’t be left behind when it comes to research and innovation.

Then there’s research and development tax relief. If you are lucky enough to have successfully received a grant, you may be somewhat surprised to hear that you could also benefit from tax relief for spending the money that you have received from the grant. You can claim under the RDEC scheme, whether you are a large company or an SME for the grant-funded projects, which for money spent since 1 April 2020 will generate either a tax rebate of up to 10.53% of the eligible costs or in the event you are loss-making a cash injection of the same 10.53%, so in a way you are having your cake and eating it.

If you are a small company and you either didn’t apply for a grant or weren’t successful in your application, but have decided to go it alone regardless then you could in fact be in line for an even greater cash injection for a loss making company of up to 33.35% of your eligible spend, if you are profitable it will reduce your tax liability by up to 24.7% of the eligible spend.

The last way the government can help is through Patent Box. If your new product is so ground breaking that you are looking to Patent it and are successful in being granted a patent, you could reduce your tax bill further, as a result of the profits being generated on the sale of the items being taxed at a reduced rate of 10%.

How Cooden can help

As we move forward in 2021, our goal is to be able to help you with all of these aspects of funding for innovation, as we look to grow our business by incorporating a business grants element to our existing family of services, which already focus on R&D and Patent Box.

In the meantime, one of the things that we have been doing is offering a reduction in our fees for companies that are developing green technology, sustainable agriculture and renewables. We’ve worked with a few companies this year and are looking to find and support more businesses that are working in these high value areas that will help all of us to be a little more sustainable in our lives. If you would like to have a chat to determine whether you have an eligible project, sustainable or not then you can book a 15 minute call with our director, Simon Bulteel.

Ultimately it feels like a lot of us accidentally became more sustainable as a result of Covid, but in spite of this, it will be great to put 2020 behind us and make the most of our new discoveries and get back to making good on our original sustainability goals as we grow into 2021.

The post Did sustainability take a back seat to survival in 2020? appeared first on Cooden Tax Consulting.

A product launch is always a fantastic opportunity for a company to celebrate their success. However, this year it’s a bit different, you won’t be doing a hard launch on a stage at a fantastic business exhibition with 100s of your potential customers in front of you. You are going to have consider a soft launch using online and hope that the phone rings.

But this year you’ve read this article, and instead of following in the footsteps of a significant number of your peers and competitors, or indeed your own business last year, you’ve realised that your product launch also represents the point at which a significant failure arises often without anyone really noticing, or even worse caring.

This year you’re going to do something different, you’re going to pick up the phone and have a conversation about Research and Development Tax Credits with an expert.

You could be missing out on R&D Tax Credits

It’s one of those, “unknown, unknown” moments that exist everywhere in business, but after being around for 20 years Research and Development Tax Credits should no longer be one of them, but it is, despite a plethora of “experts” popping up all over the space, shouting about it to accountants and to businesses alike.

Alas, thousands of businesses continue to miss their right to claim this most generous of tax reliefs.

We are but one of those experts, but we do have some substance behind our claims, we’ve been operating for 7 years now (our birthday was 1^st September) and have supported nearly 200 companies to claim more than £16m in R&D Tax Credits claims.

But back to your new product, it’s taken you a while to get from concept to launch, along the way you’ve had Eureka moments and more abject failures than perhaps you would care to mention in polite company.

You and you’re team have no doubt had several more ideas during the same time period and may be one or two of them are still going through the product development process (despite everything Covid threw at you in 2020) and your hoping to launch it in 2021 to a live audience.

Well, the good news is those failures are great news for your cashflow, they clearly weren’t at the time, but they are now. “Why” do I hear you ask? Well, normally your failure would go hand in hand with a scientific or technological challenge that you were trying to overcome. After all, we don’t set out to fail, it just seems to happen naturally! Something that you thought would be straightforward, turned out to be a massive obstacle in your path to success.

Failure presents an R&D Tax Credit opportunity

We celebrate your failure as much, perhaps more than we celebrate your success. It sounds strange and we are in no way some sort of strange voyeur watching your business with a voodoo doll and giving it a prick every now and again just to see what happens.

We celebrate your failure because we know that the failure while difficult in the short term, will open up the opportunity for you to claim Research and Development Tax Credits, whether you are paying tax or not they can boost your cashflow.

The over-riding fundamentals for a claim for R&D Tax Relief are:

• There has to be a project (developing a new/improved product)
• There has to be an advance in science or technology (you probably aren’t going to launch a new product that is worse than what you already have, or than the market already has)
• The advance has to be achieved by overcoming some form of scientific or technological challenge (the only way to overcome these is by learning and adapting through failure)
• The solution to the challenge cannot be readily deducible by a competent professional operating in the field.

If you look back through your new product development, you’ll no doubt see it littered with failures and the one or two products that do make it to the point of launch didn’t get there by some fluke, they got there through overcoming every single technical or scientific challenge you were presented with.

Now you just have one final hurdle to get over, and that hurdle is of your own making, you just have to talk to an expert to confirm that you can claim.

Find out if you are eligible – fast

Book a Find Out in Fifteen Minutes discovery section with our Director, Simon Bulteel, and start your next journey, we promise it will be worth it, just to know, for sure! Get in touch with us, speak to you soon.

The post Launching a new product and claiming R&D Tax Credits appeared first on Cooden Tax Consulting.

It has been rubbish hasn’t it, but there’s still time for a Christmas Bonus! Don’t let the opportunity pass your business by for another year.

2020 should have been a decent year; it was the start of new decade; we should have got a final idea of our future trading relationship with the EU after months of not knowing; and there was going to be an election in the US and then COVID struck. For many it has been a significant challenge, some companies have thrived, the most unfortunate companies have failed and some of us have just plodded along.

We had high hopes for 2020, continued business growth, attending a number of business shows, finding new customers, and initially everything was great, 2020 started with a bang, we had our busiest first quarter, everything went according to plan, and then at the end of March, the lights went out and stayed out for most of April and much of May, and we had our worst second quarter for 4 years. They have slowly come back on in June and July and then in August when we all would have all been away for our summer holidays, they were burning bright, just like the sunshine for some of the month, and they have continued burning in September and October and should keep going now through the dark winter months, despite this second lockdown.

As we begin to hear the death knell of this terrible year, it is also a time of frantic fiscal activity for many businesses. With a majority of companies having a December or March year end, the end of the calendar year marks a triple whammy for many. The 31^st December is the deadline to amend a Tax Return for a financial year ended December 2018, it’s also the date by which a company has to file their initial Tax Return for the year ended December 2019 and it is also the day before a company with a March 2019 year-end has to pay their tax bill!

It makes it the busiest time of the year for an R&D Tax Credits firm, but surprisingly as we enter into this period we find ourselves a little bit ahead of the game for a change.

If you are the owner or technical director of one of those companies with a December or March year end, you could enter 2021 with the prospect of a far healthier bank balance. If you were engaged in a project in 2018, 2019 or 2020 that had an element of a scientific, engineering or technological challenge and your own staff or someone else’s were working to try and solve that challenge then you could have the potential to claim for R&D Tax Credits.

If that project was focused on developing a new, or significantly improving an existing; product; material; process; or device or delivering a new or improving a piece of technology essential for your business then you really should be talking to someone about your claim.

Given that the tax savings for a company, or a group of companies employing less than 500 staff could generate a tax saving of up to 24.7% for a profitable company or 33.35% for a company that has made losses in prior year and could surrender those losses to HMRC for cash, it really should be a task that moves to the top of your to do list. If you are a larger concern with over 500 employees, or you have a balance sheet over €86m and turnover in excess of €100m then you will only be eligible for the Research and Development Expenditure Credit. Whilst not as generous, it still pays out a fairly healthy 9.72% for 2018 and 2019 and a better 10.53% from 1 April 2020.

It sounds like you might have quite a lot to lose, would you like to find out once and for all whether your company might have the potential to claim. Our discovery calls take about 15 minutes. We’ll start off by asking a couple of pointed questions and then spend most of the time listening to your answers and maybe asking more questions to explore a particular avenue. Book a call at www.calendly.com/simon-bulteel

Finally, whatever you do, stay positive, stay safe, don’t let COVID and the restrictions get the better of you or your business, have a cracking Christmas and see you on the other side, for what should be a slightly better 2021

The post Our round up of 2020 appeared first on Cooden Tax Consulting.

I also had a major panic as I was running out of cash and this time last year, the claims that we submitted in March didn’t get paid out by HMRC until June and July, if that was going to be the case then I was probably done for! Thankfully, and to their credit, HMRC have managed to retain a 28 day turn around time for a majority of the claims that have been submitted through this Covid period.

I did investigate some CBILS funding, but I didn’t have the stomach for the initial 20% Director’s Personal Guarantee that was required. So, when the Bounce Back loans were announced, I was certainly getting my hands on one of those.

Despite this and having the option to furlough some of our small team it was something I wanted to avoid doing. Yes, we all had to work from home, and yes, I struggled with the concept of communicating with them without being face to face, but we soldiered on and found a new way of working and found some new clients along the way.

R&D Tax Relief is important now more than ever

A number of interesting prospects we had been talking to before lockdown that we hoped to be working with either pulled back completely from the idea of claiming or decided to take the claim in house. I can understand the latter, it might have kept someone from being furloughed, but not the former, but even taking the claim in house for a company that hasn’t prepared a claim before or even for a while, could significantly affect its value. It’s one of those situations where working with an expert, would almost pay for itself with an enhanced claim. As I say, to not claim for R&D Tax Relief, where there is a clear case for it, especially now, is just plain crazy!

It’s not a magic money tree, but it’s the next best thing for companies that are innovating in the Food and Beverage industry, in any industry, to be honest.

How’s your cashflow been? Are you exhausting your initial funding and wondering where the next pot of money is coming from as your sales recover? Or have you had a bumper period during Covid as the British public couldn’t contain their buying frenzy?

Whatever the situation has been, we could all do with a little bit more cash at this time! If you’ve been doing something interesting with Science or Technology in your business. Developing a new product, reducing waste or energy usage, looking at manufacturing improvements or designing some new machinery or packaging, are but a few of the many qualifying activities.

Find out if you are eligible in just fifteen minutes

If you have doing anything, you really ought to take us up on our Find Out In Fifteen phone calls. We can have a quick chat about your business, you can tell me what you’ve been doing, I’ll ask you a few questions and probably there will be some good news at the end of it. You don’t have to work with us, but hopefully you’ll be happy to.

Arrange your call now.

Let us help you get some more cash in your business.

The post If you’re still Innovating, we’re still claiming R&D Tax Credits for you! appeared first on Cooden Tax Consulting.

It could be a sketch from Fawlty Towers, but it isn’t! It’s happening right here, right now. There has been a lot of new acronyms flying around these last few months, but with new acronyms come new challenges.

The rapid reaction of Rishi Sunak and HM Treasury and to a certain extent the EU Bureaucrats that oversee the rules on EU State Aid has led to a huge amount of support to business in the form of funding under the banner of EU State Aid. Clearly, we aren’t the only country to be getting involved in supporting our businesses, every country in the EU has been offering some sort of package to their beleaguered businesses.

In the UK, both the Coronavirus Business Interruption Loan Scheme (CBILS/Sybil) funding and the Bounce Back Loan Scheme (BBLS/Baubles) are being offered to businesses under the wider remit of EU State Aid permitted by the EU during the pandemic. BBLS can be granted as de minimis aid, but CBILS is a notified State Aid.

However, one of the downsides of EU State Aid is that you can only receive one form of it to support an R&D project and this is where it starts to muddy the waters. In those good ole days before Covid, that meant if you received a loan from Innovate to support your R&D project, then you couldn’t claim for the project under the SME scheme, you had to claim under RDEC. For some grants you could claim the unfunded element under the SME scheme and the funded element had to be claimed under RDEC.

Now, I haven’t heard of any businesses who have received a grant from Innovate being turned down for a BBLS or CBILS loan because of State Aid Rules, and I suspect that is because one is supporting the project and the other is supporting the company. But for a start-up, who is pre-revenue and pre-seed funding and relying on their own cash it could represent a problem.

It could certainly prove to be an issue when it comes to a claim for R&D Tax Relief under the SME Scheme for a start-up who is pre-revenue and has little or no cash reserves prior to obtaining funding from CBILS or BBLS and spends some of that money to survive and some of that money to keep innovating. I am sure HMRC will take a pragmatic and holistic view when it comes to reviewing a claim under the SME Scheme for a company that has been in receipt of CBILS and BBLS and won’t be wanting to look at specific cashflows for particular months. If you can demonstrate that you either had or generated sufficient cash outside of these new funding streams to survive, then you should be able to continue claiming under the SME scheme for your R&D project.

Whether Innovate will have to be forced to claw back grants provided to businesses who have had to also turn to BBLS or CBILS to survive I don’t know, there’s no clear evidence or advice, but they have been offering additional funding for project related costs to businesses that have existing funded projects, with a view to ensuring the projects they have already funded get completed and part of this was advancing up to 90% money before it was spent. Although application for that funding had a two week window and closed at the end of May, what companies have done since and whether taking out a CBILS or BBLS Loan will prevent companies from taking on a new grant are going to be interesting.

Fortunately there has been the ability to juggle with the de minimis aid limits which have been extended from €200,000 to £711,200 of state aid over the last three years, and as BBLS can be included as de minimis aid, a business that hasn’t taken that much support in the past three years, will probably have opportunities to mitigate the effect on their SME Scheme claim.

If you’d like to know more about this or anything to do with preparing a Research and Development Tax Relief claim, get in touch with us directly or arrange a #FindOutInFifteen minutes no obligation phone call.

The post Acronyms appeared first on Cooden Tax Consulting.

Well let’s start with some dictionary definitions from Dictionary.com

Tax- noun

1 – a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc.

2 – a burdensome charge, obligation, duty, or demand

Specialist – noun

1 – a person who devotes himself or herself to one subject or to one particular branch of a subject or pursuit.

Sometimes the specialism comes as a result of studying for a series of specific exams, other times that specialist knowledge comes from practical experience and on the job training and the repetition of an activity.

When it comes to tax there are many branches of tax, in 2016 there were over 17,000 pages and over 10 million words in the UK tax code. So to try and maintain a level of competency over all 17,000 pages is practically impossible. It is probably the most complex tax system in the world. That is why people specialise.

It is also why “Avoidance” is a hot topic when it comes to tax in the UK, with all the calls for large blue chip companies to do the right thing when it comes to their tax bill. The reason why the tax code is so long is that successive governments have wanted to add their stamp to tax legislation, but instead of repealing existing laws and publishing new ones they have just continued to add their own list of tax requirements to the tax code. It is this practice that leads to “loop holes” that the biggest companies able to afford the best tax advice in the country that they can use to reduce their tax bill. Fortunately when it comes to PAYE and National Insurance and now Pension Contributions, there are less loop holes and it is why these are the greatest generator of tax income to the UK Treasury.

Let us be perfectly clear, “Tax Avoidance” is the legal use of the tax code to reduce your tax liability to the smallest amount possible. “Tax Evasion” is the illegal non-payment or underpayment of tax.

One of the most obvious cases where a small company can find itself on a level playing field with their blue chip counterparts is when it comes to using legislated for tax reliefs for Innovation and the purchase of Capital Assets.

The former is an area that can make a significant difference to a company tax bill. The more you Innovate with your products and services, the more Research and Development you undertake and the more risks you are prepared to take both with your research and development activity and in the protection of the findings of that activity by actively protecting it with a UK or EU patent the more you can reduce your tax bill, or to put it bluntly, the more you can engage in perfectly legal Tax Avoidance and what is more, by working with the right specialist the cost is not disproportionate to the benefits and the risks and be greatly reduced.

When it comes to the purchase of Capital Assets, whether that be vehicles, machines, fixtures and fittings or buildings there are Capital Allowances that can be claimed. Over the last 20 years governments have tried to incentivise companies to invest in capital items by allowing companies to take advantage of specific enhanced Capital Allowances for environmentally beneficial assets and also larger Annual Investment Allowances which offer, at the current rate a £1m Investment Allowance. Both schemes allow for a company to get the entire tax benefit in the year of purchase rather than receive the benefit over around 20 years through a normal writing down allowance.

So in summary whatever the tax, you really should be talking to a specialist to make sure that you are paying the right amount of tax at any given time and in any given situation.

We are specialists in Tax Reliefs for Innovation, and whilst we aren’t specialists for Capital Allowances, we do know people that are! If you want to talk to a specialist about your innovations in the Food and Drink Industry specifically or in any other industry, we’d be very happy to talk to you. We offer a free, no obligation, initial 15 minute phone call to determine whether you might have the potential to claim, you can arrange that by calling us on 01424 225345 or booking on https://calendly.com/cooden/discovery-website or sending us an e-mail to info@Coodentaxconsulting.co.uk.

Just remember, Tax Avoidance is perfectly legal and the Government are desperate for you to continue innovating because it will help to increase UK Gross Domestic Product and improve our overall levels of productivity, therefore making us all better off. So to all intents and purposes, a little bit of the right sort of Tax Avoidance is good for everyone!

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It’s a question a lot of business owners ask their accountant. The typical answer is probably

“No, you’re not doing anything that qualifies!”

If you’re lucky you might get a slightly more responsive answer from your accountant

“I don’t know, it’s not something we’ve considered before, it’s not an area we cover, why don’t you go and speak to an expert.”

Or if you’re really lucky you might hear

“I don’t know, but if you’d like to talk to an expert, we’ve worked with a company before on a few clients, they’ll be able to tell you and if you have been, there’ll work with us to submit a claim for you.”

Is it something new?

No, it’s been around for nearly 20 years, R&D Tax Relief or R&D Tax Credits are still massively underclaimed by businesses. That’s predominantly because most accountants don’t understand it and aren’t proactive in talking to their clients about it.

What sort of work can you claim for?

Well that’s the million-dollar question. In essence, if you’ve been developing a new product, new piece of machinery or manufacturing process, or a new recipe, then you really should be considering a claim. If you’re thinking about patenting your invention then you definitely should be thinking about claiming and looking into Patent Box as another way of reducing your tax bill.

However, you also don’t have to be doing something new, you could be significantly improving something that already exists. You also don’t have to succeed a failed project is perhaps the best project for an R&D Tax Relief claim.

If your work has revolved around seeking an advance in science or technology and you’ve had to overcome scientific or technological challenges to do that then you should definitely consider a claim. If your project failed because the technological or scientific challenge was too great then again you should be claiming.

What constitutes an R&D Tax Relief “Expert”?

If you are going to work with an “expert”, work with someone who’s prepared to work with your accountant, not against them. You should be finding out about their experience, the number of claims they have submitted, the number of years they have been preparing claims, experience of your industry, the number of claims they have had rejected, the number of enquiries HMRC have opened into their claims and the amount of tax relief those enquiries have removed from the claim.

You also shouldn’t feel like you are doing all of the work, unless you’ve signed up to a do it yourself claims company. You’ll have to do some work, both to provide the evidence of the scientific & technical challenges that you’ve faced and in providing some of the financial information to support your claim.

Is it worth it?

The average claim for a small business is around £50,000, but perhaps a more realistic target for a small business is the median claim of just under £20,000, but it really depends how much money you’ve spent. Some small businesses have had claims over £1m, but their R&D project will probably have cost them at least £4m.

If you are interested in learning more about the tax relief that could be available to your business, contact the team at Cooden Tax Consulting today.

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