Don’t let your tax affairs get out of control! With corporation tax, you need to think ahead.

When you start up a business, if you decide to form a limited company, you will need to assess your business for corporate tax. This essentially examines your profits for the previous accounting year and calculates your tax liability based on these profits.

At Barnes Roffe we can take care of your annual tax compliance, as well as advise you on the best use of reliefs and allowances available.

Even small companies can benefit from tax planning advice – for example, with changes in capital allowance rules it is important to consider matters such as timing of asset purchases.

We have a dedicated tax team who can advise on all areas of corporation tax, from capital allowances to more complex strategic considerations, accounting for tax across a group, or specialist areas such as Research and Development tax credits

Whether you are worried about the cost of your small business tax or are more interested in learning about how corporate tax works, we can help you. At Barnes Roffe we are can provide you with the tax help, advice and support you need so that you can effectively work out the profitability of your business and make sure you receive the right tax deductions on all your tax liabilities.

Contact our team today and let us help you to make understanding tax simpler.

The EMI (Enterprise Management Incentives) scheme is the most popular type of share option scheme available. It is approved by HMRC and enables share options to be granted to selected employees without any tax implications. Both employee and employer can benefit from this tax advantageous scheme.

A share option is the right to buy a certain number of shares at a fixed price, at some time in the future. Employees can exercise their options – buy the shares – after a ‘vesting’ period or upon the satisfaction of preset performance conditions. The employer can make the granting and exercising of options dependent on reaching certain targets which may be applicable to the company or the individual.

We can advise and implement a scheme tailored to your requirements which will:

• attract, retain and motivate key employees;
• retain flexibility and control over many aspects of the share options you grant (i.e. subject them to performance measures and/or time limits);
• improve reported results by providing share options instead of salary to employees;
• increase competitiveness by offering a diverse remuneration package and opportunity for ownership.

A market value for the shares is agreed at the time they are granted and if this amount is paid by the employee on exercise of the option then no income tax liability will arise even if the shares are worth considerably more at that time.

As stated above, the company may place conditions which must be satisfied before the options can be exercised and these will ensure that the employees perform at a sufficient level to justify the reward of ownership in the company.

Key features of the scheme include:

• Options over shares worth up to £250,000 at the date of the grant can be granted to an employee, and these are tax and NIC free on the grant.
• On exercise, the employees can obtain shares at a large discount without any tax implications.
• The scheme is available for employees selected at the company’s discretion.
• The company will get corporation tax relief for the costs of operating the scheme including a corporation tax deduction for the difference between the value of the shares at grant and the amount the employee pays for the shares.
• The shares may qualify for “Business Asset Disposal Relief” which means that on disposal of the shares, tax paid by the employee could be as low as 10%.

The Research & Development tax credits scheme is a generous Government initiative designed to stimulate business growth through increased business tax deductions and direct cash injections.

Barnes Roffe LLP has a thorough understanding of the rules of this scheme and can help you maximize your claims.

Many businesses are missing out because they think they will not qualify but the scheme is not just for laboratory based ‘blue sky’ projects. Technological, engineering and computing software projects are just some of the areas that can also qualify. The key criteria are that you are being innovative and advancing knowledge in your field of business.

If you can answer yes to any of these questions then you may be doing qualifying R&D and you need to talk to us.

• Do you manufacture anything?
• Do you develop your own software?
• Do you carry out design work?
• Do you use existing technologies in a unique way or are they combining existing technologies in a way never previously done?
• Have you adapted existing technologies to reduce production costs or times, or to reduce waste or improve scalability?
• Have you developed or adapted computer software?
• Have you written new computer algorithms or languages?

The SME (Small and Medium Enterprises) scheme allows you to claim a tax deduction of 230% of your actual expenditure on the project. Not all expenditure will qualify but Barnes Roffe LLP has a proven methodology to ensure that your claim will be as complete as possible.

And if you are loss making, you can surrender your loss for a cash refund from HMRC.

Qualifying expenditure

• Staff costs (salaries, employer NIC etc)
• Consumable items such as materials and energy costs
• Software used in the Research & Development
• Payments to external sub-contractors assisting your Research & Development project
• Accelerated deductions for capital expenditure

Business areas that have benefited

• Mechanical Engineering
• Manufacturing
• Electronics
• Construction
• IT/Software
• Pharmaceuticals
• Biotechnology

Barnes Roffe LLP will:

• Assess your potential claim
• Collect and audit the necessary information
• Prepare and submit your claim
• Deal with any HMRC queries
• Help you put in place systems for capturing all future projects and expenditure.

If you would like to arrange a more in-depth discussion with our team about our experiences in Research and Development tax credits and whether you are able to utilise these, please contact us at Barnes Roffe for more information.

VAT

VAT (Value Added Tax) is a tax that is charged on most business transactions in the UK.

There are different rates of VAT applicable to different types of transactions., the most common being:

• Standard – 20%
• Reduced – 5%
• Zero – 0%
• Exempt

VAT is charged on most goods/services, but if you wish to reclaim the VAT you spend, you need to become a VAT registered business.

Who must register?

If the goods/services you supply count as ‘taxable supplies’, you’ll need to become VAT registered, especially if your turnover for the last year has gone over the VAT threshold,  or if you think your business will soon surpass this threshold.

If you are having problems determining whether or not to become a VAT registered business, Barnes Roffe can help. We offer VAT return preparation services, as well as VAT advice and guidance.

It’s not that simple…

VAT is perhaps the most complicated tax. From partial exemption calculations to reverse charge rules, cross-border trading to land and property transactions, the possible pitfalls and complexities are many. It is vital to get professional VAT advice as the cost can be great if you make the wrong decision. Advance planning is invaluable.

Our tax team and specialist VAT consultants can advise you on all areas of VAT.

We also offer a VAT Healthcheck service, giving you peace of mind over your VAT compliance.

At Barnes Roffe we are much more than your average tax accountants. Through our commitment to offer you the best quality tax advice, our tax consultants can help you to calculate all of your taxes as well as provide you with in-depth business strategies.

Contact our tax team today and we can help you understand how VAT affects your business.