Welcome to our round-up of the latest business and tax news for our clients. Please contact us if you want to talk about how these updates affect you. We are here to support you!
I hope you have a good weekend.
Kind regards,
Steve
Steven Hillman BSc (Hons) ACA
Chartered Accountant
Tel: 01934 444100
https://www.hillmans.co.uk
HMRC guidance on goodwill valuations
The valuation
of business goodwill for tax purposes is very subjective and is often a
contentious area. HMRC have recently updated their guidance in their Shares and
Assets Valuation Manual.
The guidance
makes a distinction between goodwill for Capital Gains purposes and goodwill
within the corporate intangibles regime where accountancy principles apply. The
accounting rules define goodwill as the difference between the overall worth of
a business when it changes hands and the value of its identifiable (including
intangible) assets.
The HMRC
guidance goes on to state that the goodwill of a business is the “attractive
force” which brings in custom, it is the thing that distinguishes an old
established business from a new entity. In a business reliant on the skill,
personality and other personal attributes of the proprietor, it is likely that
the goodwill will be personal to the proprietor.
The guidance
also sets out the information required by HMRC Shares and Assets Valuation when
asked to agree on a goodwill valuation with the taxpayer.
Note that the
disposal of goodwill and customer-related assets by individuals no longer
qualifies for CGT Business Asset Disposal relief (previously entrepreneurs’
relief) but the disposal would be subject to CGT at normal rates. Corporate
intangibles relief for the acquisition of goodwill was abolished for
acquisitions from 7 July 2017, although a restricted form of relief was
introduced in the Finance Act 2019.
We can assist
you in valuing the goodwill of your business and calculating the value of your
business in general whether for tax purposes or when you are considering a
sale.
Thinking of selling your business?
The ultimate
aim of every serious business person is to build a company that has value, so
that it can be sold or transferred, allowing the entrepreneur to exit
gracefully and profitably.
Recently, we
have been helping a number of our entrepreneur clients develop exit strategies.
There are many issues to consider:
•
When
do you want to retire?
•
Can
the business be sold to your employees?
•
Is
a trade sale more likely?
•
Are
there children involved?
•
How
much is the business worth?
•
What
needs to be done to enhance the value of the business?
•
How
long will it take?
•
Do
you want/need to stay on after the sale or transfer?
•
What
are the tax consequences?
We have a tried
and tested methodology to address these issues and to help you prepare your
business for sale, find potential buyers and help you negotiate to get the maximum
price. If you would like to discuss your personal exit plans, we would be happy
to do so with you — please call us!
HMRC make arrests in connection
with suspected fraudulent R&D claims
In the light of
a recent article in The Times last week, the HMRC Press Office issued the
following tweet:
“By acting quickly to pause
payments and implement additional checks on claims we have protected £46
million of public money. We have also arrested 8 people suspected of conspiring
to submit over 100 fraudulent R&D claims”
The current
rules allow small and medium-sized companies undertaking qualifying research
and development expenditure to claim a tax refund equivalent to 33.35% of the
expenditure. This is because the relief is currently 230% of the amount spent and
any resulting loss can be surrendered for a 14.5% refund from HMRC. This
generous tax break has led to a number of alleged “rogue” R&D consultants
making spurious claims on behalf of companies.
What
projects qualify for R&D tax relief?
HMRC have also
recently updated and reissued their guidelines on the conditions to be
satisfied for a valid R&D claim:
The accountancy
definition of R&D is modified for tax purposes by the Guidelines, which are
given legal force by Parliamentary Regulations.
Note in particular
that R&D for tax purposes takes place when a project seeks to achieve an
advance in science or technology. The activities which directly contribute to
achieving this advance in science or technology through the resolution of
scientific or technological uncertainty are R&D.
Certain
qualifying indirect activities related to the project are also R&D.
Activities other than qualifying indirect activities which do not directly
contribute to the resolution of scientific or technological uncertainty in an
overall project are not R&D.
An advance in
science or technology means an advance in overall knowledge or capability in a
field of science or technology (not a company’s own state of knowledge alone).
This includes the adaptation of knowledge or capability from another field of
science or technology in order to make such an advance where this adaptation
was not readily deducible by a competent professional in that field.
A process,
material, device, product, service or source of knowledge does not become an
advance in science or technology simply because science or technology is used
in its creation. Work which uses science or technology, but which does not
advance scientific or technological capability as a whole is not an advance in
science or technology.
If you think
that some of the technological developments that are being carried out within
your company might qualify as R&D please contact us so that we can consider
whether or not you might be eligible to make a valid claim for this generous
tax relief.
Self-Assessment: Declare your
COVID-19 payments
HMRC is
reminding their Self-Assessment taxpayers that they must declare COVID-19
payments in their tax return for the 2021 to 2022 tax year.
More than 2.9
million people claimed at least one Self-Employment Income Support Scheme
(SEISS) payment up to 5 April 2022. These grants are taxable and should be
declared on tax returns for the 2021 to 2022 tax year before the deadline on 31
January 2023.
SEISS
payments
The SEISS
application and payment windows during the 2021 to 2022 tax year were:
●
SEISS
Four: 22 April 2021 to 1 June 2021
●
SEISS
Five: 29 July 2021 to 30 September 2021
Other
payments
SEISS is not
the only COVID-19 support scheme that should be declared on tax returns. If you
received other support payments during the 2021 to 2022 tax year, you may need
to report this on your tax return if you are:
●
Self-employed
●
In
a partnership
●
A
business
See: Reporting coronavirus (COVID-19) grants and support
payments - GOV.UK (www.gov.uk)
Company Tax Returns – Job
Retention Scheme and Eat Out to Help Out
If you received
a Coronavirus Job Retention Scheme (CJRS) grant or an Eat Out to Help Out
payment, you will need to do both of the following:
●
Include
it as income when calculating your taxable profits in line with the relevant
accounting standards.
●
Report
it separately on your Company Tax Return using the Coronavirus Job Retention
Scheme and Eat Out to Help Out boxes.
You should
record all other taxable COVID-19 payments as income when you calculate your
taxable profits.
Please talk to
us if you require our help in disclosing grants and other support to HMRC.
See: Corporation Tax forms - GOV.UK (www.gov.uk)
Business Finance Week 2022 – This
week!
Throughout this
week, the British Business Bank, along with business support partners from
across the UK, are working together to host the inaugural Business Finance Week
2022.
During the five
days of nationwide and regional in-person events, webinars and more, they hope
to help smaller businesses learn all about the different finance options
available to them to support their individual needs.
Each day will
be centred around a key theme, giving SMEs the opportunity to hear from experts
in their field on a varied range of subjects.
The themes are:
●
Funding
your start-up – 7 November 2022
●
Angel
investment – 8 November 2022
●
Equity
for growth – 9 November 2022
●
Debt
for business – 10 November 2022
●
Green
finance – 11 November 2022
See: Business Finance Week 2022 - British Business Bank
(british-business-bank.co.uk)
Sustainable Food Investment
Readiness Programme 2022
Innovate UK Knowledge Transfer Network (KTN) is looking for
innovative UK SMEs who wish to seek private investment to fast-track
sustainable food innovation and who would benefit from investment pitch
training, mentorship and an opportunity to present to investors at an Investment
Showcase Event.
The scope of
the Sustainable Food Investment Readiness Programme includes:
●
Agri
tech
●
Sustainable
protein
●
Controlled
environment agriculture
●
Low
emission food production systems
The aim of the
programme is to prepare SMEs to successfully and succinctly communicate their
investment opportunity to investors and improve their chances of securing
private funding for their innovation.
Successful
applicants will receive online and in-person investment pitch training and
mentorship, and an opportunity to present their final pitch to an internal
Innovate UK and Innovate UK KTN selection panel.
Up to 14
participants from the training cohort will then be selected to present their
investment pitch to a pool of private sector-relevant investors in the
Sustainable Food Investment Showcase Event in February 2023.
All training
will take place at the Innovate UK KTN London office unless otherwise stated.
The Small Business Saturday UK
Tour will hit the road again this November!
Calling at 23
different towns and cities across the UK, the special ten-year anniversary tour
will mark the official countdown to Small Business Saturday on 3 December 2022.
‘The Tour’
kicked off in Glasgow on Monday 31 October 2022 and will travel across the UK
for five weeks, spotlighting Britain’s amazing small businesses.
And to be as
sustainable as possible, given the vital role small firms play in the race to
net zero, the tour will be using a fleet of electric and zero-emissions vehicles.
Once again,
‘The Tour’ will offer:
●
Livestreamed
interviews with business owners and local leaders on their Instagram channel
(@smallbizsatuk).
●
Free
1-1 mentoring sessions.
●
A
range of business experts available to offer individual help and advice.
See: Small
Business Saturday UK | Another year making a Big Difference!
Trustees’ Week 2022
Trustees are
the people in charge of a charity. They play a vital role, volunteering their
time and working together to make important decisions about the charity’s work.
Trustees’ Week is an annual event to showcase the great work that trustees do
and highlight opportunities for people from all walks of life to get involved
and make a difference.
This year Trustees
week takes place from 7 November to 11 November 2022.
Events all
around the country will celebrate the achievements of trustees, as well as
highlight opportunities for you to get involved with a local charity or
voluntary organisation at the board level.
See: Trustees Week – Showcasing the work of charity trustees
Latest recommended Christmas
posting dates
Royal Mail has
released the latest posting dates for Christmas. They say to allow plenty of
time for posting and post items and gifts for Christmas early, particularly for
international deliveries:
●
Friday
16 December 2022 – Royal Mail Bulk Mail Economy
●
Monday
19 December 2022 – 2nd Class, 2nd Class Signed For, Royal Mail 48®
●
Wednesday
21 December 2022 – 1st Class, 1st Class Signed For, Royal Mail 24®, Royal Mail
Tracked 48®**
●
Thursday
22 December 2022 – Special Delivery Guaranteed® Royal Mail Tracked 24®**
●
Friday
23 December 2022 – Special Delivery Guaranteed® with Saturday Guarantee
** Royal Mail
Tracked 24® and Royal Mail Tracked 48® are not available to purchase at Post
Office® branches.
See: Get ready for Christmas 2022 | Royal Mail Group Ltd
Net zero living: pioneer places
UK registered
businesses and local authorities can apply for a share of up to £2 million to
develop detailed local plans for innovative approaches to unlock non-technical
systemic barriers to the delivery of net zero targets.
The aim of this
competition is to support up to 30 places to develop a plan, with local
authorities, to accelerate their transition to net zero.
You must
consider the whole net zero system in your area, including:
●
Power
●
Heat
●
Mobility
●
Product
manufacture and usage
This
competition is open to collaborations only and closes on 30 November 2022.
Innovate UK Smart Grants: October
2022
Innovate UK,
part of UK Research and Innovation, has launched another round of Smart Grants
funding for game-changing and commercially viable R&D innovation
Up to £25
million is available for disruptive research and development (R&D)
innovations that can significantly impact the UK economy. All proposals must be
business-focused, with deliverable, realistic, adequately resourced plans to
achieve a return on investment, growth, and market share following project
completion. Applications can come from any area of technology and be applied to
any part of the economy, such as:
●
Net
zero
●
The
arts
●
Design
and media
To be in scope,
your proposal must demonstrate (amongst other things):
●
A
game-changing, innovative, and disruptive idea that will lead to new products,
processes or services.
●
An
idea that is significantly ahead of others in the field, set for rapid
commercialisation.
●
Clear
potential to positively impact the UK's position, productivity and
competitiveness within the global economy.
Projects can be
across a variety of technologies, markets and research categories, including:
●
Feasibility
projects
●
Industrial
research projects
●
Experimental
development projects
Your
application must include at least one micro, small or medium-sized
enterprise (SME) as the lead or a collaborative grant claiming partner.
Projects must
start by 1 July 2023 and end by 30 June 2026 and follow specific rules
dependent on their duration.
HSE Health and Work Conference
This
interactive, free all-day event will take place virtually and is part of the
Health and Safety Executive’s (HSE) approach to inspire and promote better
prevention, management and control of the common risks and causes of
work-related ill-health across Great Britain.
Building on the
success of last year’s conference, which saw huge demand, HSE has increased the
capacity five-fold to provide 5,000 spaces for delegates. Discussions will
cover topics including work-related stress and mental health, occupational
health, musculoskeletal disorders, controlling radiation in the workplace and
occupational lung disease.
Delegates at
the event will see how health and work are evolving not just in response to the
pandemic, but also around the actions we need to take collectively as
employers, employees, regulators and others to prevent harm caused by
work-related ill-health.
It will provide
a unique opportunity for businesses, public and third-sector organisations,
health professionals and others to engage directly with regulatory inspectors,
scientists and health topic specialists.
The conference
takes place on 15 November 2022 and you can view the agenda by selecting the
following link Health & Work Conference 2022
(healthandworkconference.co.uk)
For further
information and to register for the conference please select the following
link Health & Work Conference 2022
(healthandworkconference.co.uk)
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