Innovate

R&D tax reliefs and grants work … will Patent Box work better?

Innovation is one of the best drivers of growth for an owner managed business… and luckily the Government really does get it… offering some bonkersly brilliant and accessible help that actually works for companies like yours…

As a form of Corporate Welfare (which I’m generally against) these innovation-orientated tax breaks and grants rather surprisingly do what they’re supposed to do… boost productivity and create jobs (which I absolutely love)

Innovate UK are busy getting grant money out to innovative firms… and, as the Enterprise Research Centre recently reported, the range of grants available has made a real impact… Over a 13-year period, R&D grants spurred growth worth £43bn to the British economy – more than five times the £8bn invested – and created around 150,000 jobs

… one helluva an ROI

But R&D Tax Reliefs  are doing even better imo… not only does research suggest this tax saving for SMEs is working financially…  Our current evaluation suggests that for each £1 of tax foregone, between £1.53 and £2.35 of R&D expenditure is stimulated… I believe it is changing the mindset of some of the companies applying…  

What started out as an attempt to justify a claim for a extra tax deductions and get money back from HMRC… is morphing into a mindset shift for the companies involved as they start to genuinely put innovation at the heart of what they do…

And I think the Patent Box could take that shift towards innovation to a completely different level…

The tax relief for having a Patent is now so good that companies I tell about it immediately start to think what they are doing or can do that’ll lead to a narrow patent and get them a 10% Corporation Tax rate for a couple of decades…

Changing minds is surely one of the hardest things for a Government to do… but, because of these innovative tax reliefs, minds really are changing when it comes to innovation

Here’s a couple of older blog posts on the subject…

R&D Relief

First Claim

Patent Box

And a great (if slightly technical) site for keeping up to date with any odd updates to the tax reliefs…

Keeping tabs on changes to reliefs

 

 

 

Floating on a Stock Exchange… a secret dream? If not… why not?

So Mark Fahy from the London Stock Exchange dropped by to talk about a cracking programme they run for growth companies who 1. fancy knowing more about how scaling, capital & finance work… 2. fancy making some great connections and 3. maybe flirt with the thought of a float one day…

If that might be you… then get in touch

Here’s Mark’s linkedin profile with contact details

Main thing is the guy is a Man City fan… ’nuff said 🙂

 

Floating on the Stock Exchange… a secret dream? If not… why not? from Peter Wild on Vimeo.

 

website cost or not

Website… a Cost or an Asset?


Your own view doesn’t really matter… but what your accountant thinks does… because your website can be treated as an Asset and not a Cost…

… which means a boost to this year’s Profits… a strengthened Balance Sheet… and an improving credit rating…

Old Rules

For most of you, in the past when you bought or built a new website the cost was written off through the Profit & Loss…

A lucky few who built their own may have had an accountant prepared to use UITF Abstract 29 Wesbite Development Costs (issued in February 2001) to take those costs and put them into the Balance Sheet as a Tangible Asset…

… and a luckier few who paid for a site to be built for them had accountants happy to capitalise website costs as an Intangible Asset

New Rules

For year ends December 2015 & onwards there’s a new set of accounting rules FRS 102 replacing the old rules…

… if you’ve recently bought or are developing a new website for yourself you need to get your accountant to look carefully at how those costs get treated…

Because I see no reason for most of those costs to hurt your bottom line (unless you want them to!)… a bought website can be capitalised as an Intangible Asset… an internally built website can be Tangible or Intangible…

As the ACCA say … FRS 102 leaves it up to you and your accountant to ‘develop a suitable accounting policy’…

The Tax Man

So what does the tax-man make of your website…? well… here’s what they say

“The cost of a web site is analogous to that of a shop window. The cost of constructing the window is capital; the cost of changing the display from time to time is revenue”

So the Tax Man says the building or buying of your new website can be an Asset… later content & changes can be Costs…

But bear in mind that if you do choose to treat your new website as an Intangible Asset…

… your taxable Profits will go up (by moving costs out of the profit and loss)…

… and in future years they will be lowered by Amortisation (a fancy word the Depreciation of an Intangible Asset)

So… Website… a Cost or an Asset?

Up to you & your accountant really… but I guess that decision will be informed by whether or not you want boosted Profits & Balance Sheet this year?

Either way…

‘Nobody Dies’