Coronavirus and R&D Tax Credits

Research and development (R&D) tax incentives are an effective way for companies to get a cash rebate from HMRC. This incentive and cash rebate could be more important than ever if you are struggling with cash flow due to the coronavirus.

Many companies are taking advantage of the lock-down period and time available to file an R&D claim with HMRC. HMRC are processing claims more rapidly at present to better support businesses cash flows, quoting up to 5 weeks rather than the 8-10 weeks previously.

Whilst rebates vary, over the past 6 months the average claim size for our clients has been £18,000! 

It is a common misconception that to be engaged in Research and Development activities that a company must be running labs packed full of people in white coats. This is not the case! You simply must have attempted to overcome scientific or technological uncertainties by creating new or enhancing existing products, services, software or processes in order to have a qualifying R&D activity.

You would be surprised at how many companies fulfil these criteria without realising they are eligible for a significant tax benefit.

If you would like to discuss making an R&D claim further, please drop me a line.

Best wishes,

Steve

Steven Hillman ACA
Chartered Accountant
Tel: 01934 444100

Fundamental Changes to the Taxation of Dividends - 6th April 2016

As part of his Summer Budget speech, the Chancellor announced fundamental changes to the way in which dividends are taxed for individuals.  

We have reviewed the detail of the measures, which are due to take effect from 6 April 2016.  Consequently we would advise that that all shareholders of companies which yield dividends should take stock of their affairs now, before this change takes place.  

The current regime

Dividend income is currently taxable at various rates:

• Basic rate taxpayers – 10%, giving an effective rate of 0% after deducting the tax credit;
• Higher rate taxpayers – 32.5% (an effective rate of 25% on the net dividend);
• Top rate taxpayers – 37.5% (an effective rate of 30.6% on the net dividend).