Are you missing out on R&D tax credits?

Are you missing out on R&D tax credits?

 

There are thousands of pounds being lost in tax relief by eligible companies every year. This reflects the common misconception that Research and Development (R&D) is confined to manufacturing plants, tech giants or research laboratories, when in reality, the ideas and inspirations that move industries forward have their roots in everyday innovation by the professionals on the ground.
R&D tax relief is the government’s way of rewarding businesses that invest in innovation.
This innovation can be in the form of developing new, or improving existing products, processes, services, devices and materials or advancing the state of knowledge in their sector.
You can get a deduction from your corporation tax bill or even receive a cash payment from HMRC for your R&D tax credit claim.

Key stages in ascertaining an R&D tax credit claim include:

• Discussing your technology in detail to figure out if it does indeed qualify
• Evaluating your technology with consideration of which R&D Specialist Unit will be looking at it (different ones have subtly different criteria)
• Preparing a technical narrative that presents your technology in the best possible way to minimise the chances of an audit
• Calculating the size of the claim based on HMRC’s ever-changing criteria (which are also specific to each R&D Specialist Unit)
• Filing the claim directly with a specialist unit to ensure that it is looked at by a specialist (and not an HMRC inspector who suddenly takes an interest in tax credits but has never looked at a claim before)
• Following up on that filing to ensure it is looked at promptly
• Providing a first line of defence when handling questions from HMRC (including ones about the technology), so that unless an audit is requested, you don’t even need to worry about the claim and just wait for the money to come in
• If an HMRC audit does occur, prepping key tech and finance members of your team so that they know how to answer questions in the most favourable way, and sitting in the audit meeting with you to help handle HMRC questions.

Ascentant can help you determine if your business activities are eligible for tax relief and will maximise the claim you make by identifying the biggest relief possible.
If you would like to find out more, contact Ascentant on 01332 897356 or info@ascentant.co.uk

Ascentant are Accountants and Business Consultants with offices in Derby, Nottingham and London.

Small Business Support

Small Business Support in Derby

If you are an SME in Derby or Derbyshire, are you aware of the support available for your business? Here we take a look at some of the options available.

Apprenticeship Grant

If considering employing an apprentice, employing a 16-18 year old makes you eligible for a £1,000.00 grant. Employing an apprentice allows you to train an employee from scratch and you pay the apprentice the apprenticeship wage for the first year of employment which currently stands at £3.70 per hour.
If considering employing an apprentice in Derby, we recommend contacting the 3AAA Academy.
https://www.3aaa.co.uk/employer/

NBV

NBV offer grants and startup loans to small businesses in the Derby area. Grants can be used for IT equipment, Tools and machinery, consultancy services, marketing services or IT services.
NBV grants are match funded, meaning that the small business will need to put in some of its own funds to be eligible for grant funding.
https://nbv.co.uk/growing-a-business/grant-for-enterprise/

BigHouse/ Mainframe

BigHouse offers support to small and startup businesses in the creative industries in Derby. From networking events and training to funding and financial support, Bighouse specialise in working with creative, artistic and digital businesses.
A number of grants are available including grants to hire freelancers or graduates through the elevator programme.
Mainframe runs at the Quad in Derby and runs a number of workshops and networking events including the Digital Drop in on the first Friday of the month.
https://bighouse.org.uk/
http://mainframederby.co.uk/

Digital Growth Club

The digital growth club offers small businesses access to high quality and free or low cost training and workshops covering areas from social media and SEO to web design and other digital growth support.
The digital growth club also offers grant and funding support.
https://www.ebusinessclub.biz/

Invest2Grow

For businesses looking to grow or invest in large projects, Derby University run the Invest To Grow scheme which is loan and grant funded.
The minimum award is currently £15,000.00 with the minimum project cost being £50,000.00.
The programme is particularly aimed at sectors including creative, transport, engineering and logistics.
https://www.derby.ac.uk/business-services/funding-services-and-support/access-to-funding/

D2N2 Growth Hub

The D2N2 growth hub is the local Derby and Nottingham Local Enterprise Partnership (LEP) which supports start up and growing businesses through training, mentoring and grant funding.
https://www.d2n2growthhub.co.uk/

Internship funding

Derby University offer funding programs for small businesses to take on interns during term time. Interns must be paid the minimum wage and can last upto 5 months.
A £500.00 grant is currently available to contribute towards the cost of employing an intern.
https://www.derby.ac.uk/business-services/recruiting-the-best-talent/access-our-talent/internships/derby-internship-programme-funded-internships/

Ascentant are Accountants and Business Consultants with offices in Derby, Nottingham and London. Contact info@ascentant.co.uk or 01332 897356 further information on small business support in the Derby area.

Making tax digital

Making Tax Digital – VAT

From April 2019, as part of the Government’s Making Tax Digital (MTD) programme, VAT registered businesses with taxable turnover above the VAT registration threshold (currently £85,000) will have to keep their records digitally (for VAT purposes only) and submit their VAT return information to HMRC digitally through ‘MTD functional compatible software’.

If you are VAT registered and don’t currently use a digital accounting package (such as Sage, Xero or QuickBooks) to record your VAT information (e.g. invoices to customers and from suppliers), you need to start planning for Making Tax Digital now. Ascentant can provide further information about the various software options available, and help you decide which is the best option for your business. We can also provide support with the installation and training on how to use the software.

Who is affected by MTD for VAT?

Businesses that are VAT registered with taxable turnover above the VAT registration threshold (currently £85,000) will be required to submit digital information to HMRC under the MTD for VAT regime.

Businesses voluntarily registered for VAT but with taxable turnover under the VAT registration threshold will not be subject to MTD for VAT.

The requirement still applies even if the taxable turnover of the business subsequently falls beneath the VAT registration threshold. The requirements of MTD for VAT only cease to apply if you deregister from VAT.

When does Making Tax Digital for VAT reporting come into effect?

MTD for VAT will apply to VAT return periods starting on or after 1 April 2019.

Will VAT reporting & payment dates change?

Submission dates and payment dates for VAT are not currently expected to change.

Monthly and annual VAT return schemes will continue to be submitted on the same basis as previously but will need to keep and submit digital records. This also applies to businesses that operate the Flat Rate Scheme for VAT.

Can I be exempted from MTD for VAT?

Businesses are exempt from MTD for VAT if in the previous 12 month period they had taxable supplies beneath the VAT threshold and in that previous 12 months were not already part of the MTD for VAT regime.

Further exemptions are available on the grounds of incompatibility with religious belief, disability, or if the businesses is in insolvency procedures.

What are the requirements for MTD for VAT reporting?

Businesses must use “functional compatible software” to submit digital information to HMRC. In simple terms this means some form of computerised bookkeeping software or cloud accounting package must be used to connect to HMRC to submit information to them. Spreadsheets are allowed but only in conjunction with some kind of digital platform to submit the information HMRC.

How will this change the normal VAT return procedure?

The VAT return will be populated with information directly obtained from the underlying digital records. The return will still look the same as it has previously done with its normal nine boxes, but behind these figures will be supplementary information providing a summary to HMRC of the cost types incurred, such as totals for rent and rates, motor expenses, etc.

The penalty regime for failing to keep digital records will correspond to the existing regime for failing to keep adequate records for VAT purposes.

What happens if I make errors on the VAT/MTD return?

HMRC say that the current procedure for notifying HMRC of any errors made on a VAT return will remain the same i.e. correct on the next return or submit a form VAT652 depending on the size of the error. There are plans for HMRC to introduce an electronic channel for notifying but until that point, the existing procedures should be adopted.

Anything else I should know?

The Government intend to have all requirements for MTD for VAT fully legislated by April 2018 which will allow a full 12 month run-up for software providers and taxpayers to prepare for the changes.

Businesses will not be required to keep digital records or provide quarterly updates for HMRC for other taxes until at least April 2020.

The proposed legislation states that taxpayers are permitted to submit information more frequently than their current VAT cycle should they wish. For many, this is unlikely to cause great excitement, but for those keen to get on with new regime there is already a pilot programme ongoing where MTD for VAT can be experienced before April 2019.

For further information on complying with your MTD requirements, contact Ascentant on 01332 897356 or info@ascentant.co.uk. Ascentant are Accountants and Business Consultants with offices in Derby, Nottingham and London.

What you need to know before setting up limited company.

We receive a number of questions here at Ascentant, both from clients and online via #AskAscentant. Here Kevin Drew, Managing Director answers some of the common queries that new businesses ask.

 

Q – What taxes or filings are due for a limited company?

A – A limited company must complete an annual return (confirmation statement) on the anniversary of incorporation. Thereon a limited company must file annual accounts with companies house and a corporation tax return to HMRC. Directors must complete an annual self assessment tax return. VAT and payroll filings may also be applicable if registered for these schemes.

 

Q – Who do I need to register with?

A – When setting up a Limited Company, you will need to register with Companies House for company registration and HMRC for tax filings. Depending on the type of business, it may also be necessary to register with the information commissioner (ICO) if holding data.

 

Q – How can I pay myself?

A – It is recommended to set up a payroll scheme to pay directors via monthly payroll, paying tax and NI monthly. Once profits have accumulated into retained earnings, directors can also take dividends from the business, utilising their annual dividend allowance.

 

Q – Can I claim expenses working from home?

A – There are set allowances that can be claimed for working from home without receipts. You may also be able to claim proportionate expenses for heat and light expenses.

 

Q – What other expenses can I claim?

A – You can claim mileage or petrol allowances, the cost of phone calls and other incurred expenditure, relating to the business. Business expenses are tax deductible if incurred for business purposes.

 

Q – Can I obtain business finance?

A – As a Limited Company, it may take some time to build up a credit rating before the business can obtain finance. You should be able to open a bank account and apply for an overdraft. Any loans or other finance may require a personal guarantee by a director until the business is credit worthy.

 

Q – How much will accountancy fees cost?

A – Accountancy fees vary widely for Limited Company accounts, but usually range from £750 – £1,500 + VAT for a basic set of financial statements. More complex accounts will cost more.

 

Ascentant are Bookkeepers, Accountants and Business consultants. We are based in Derby with a small office in Nottingham and London.

SOLE TRADER FAQ

What you need to know before setting your own business as sole trader.

We receive a number of questions here at Ascentant, both from clients and online via #AskAscentant. Here Kevin Drew, Managing Director answers some of the common queries that new businesses ask.

 

Q – What taxes are due for a sole trader company?

A – A sole trader will need to complete an annual self assessment tax return and pay tax/NI on profits. Payments on account may be required to pay tax twice a year in January and July depending on the amount due.

 

Q – Who do I need to register with?

A – You should register with HMRC for a UTR number when beginning self employment.

 

Q – How do I register my business name?

A – You cannot register a company name as a sole trader, however you can choose a trading name to trade under. You should check that you are not infringing on a trademark or passing off another named business.

 

Q – Who is liable in the event of a legal dispute?

A – Inn the event of a legal dispute, you will be sued personally unless you have suitable insurance. You and the business are the same legal entity.

 

Q – Can I obtain business finance?

A – If looking for a loan or business finance, you and the business are the same entity. You will therefore need to offer a personal guarantee against any business credit or finance.

 

Q – How can I pay myself?

A – You can withdraw profits from the business, but it is not classed as remuneration as you are not an employee.

 

Q – Can I claim expenses working from home?

A – You will be able to claim a deduction for mortgage interest, rates and light and heat if you have an office at home.

 

Q –What expenses can I claim?

A – You can claim capital allowances on the purchase of a computer, but mobile phones will be subject to a private usage adjustment. You will be able to claim tax relief on expenses incurred wholly and exclusively for business.

 

Q – How much will accountancy fees cost?

A – Generally a self assessment tax return will cost around £100+VAT and production of a set of financial statements or accounts in the region of £200 – £300.

 

Ascentant are Bookkeepers, Accountants and Business consultants. We are based in Derby with a small office in Nottingham and London.