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Tax planning affects all your financial affairs. You may be worried about the impact of inheritance tax on property as values rise, how to dispose of a share in a business, how to manage your tax exposure when selling a business or the most tax-efficient way to pass on your estate.
Whatever you need, our tax expertise can help structure your personal tax affairs effectively to save you time and effort and considerably cut your tax bill.
How we can help
Reviews: reviewing your personal financial affairs to identify income tax, inheritance tax (IHT) and capital gains tax exposures and developing a strategy to maximise reliefs and exemptions
Income tax: advising on investments, the taxation and administration of estates and trusts and overseas income
Capital gains tax: advising on tax reliefs, such as business asset disposal relief, as well as exemptions, asset transfers, gifts and the timing of disposals
Inheritance tax: developing a strategy to achieve your financial goals which may involve lifetime gifts, help drafting or revising an existing will, or establishing trusts and life assurance
Rule changes: advising on tax rule changes, including impacts on dividends, savings, share valuations and offshore trusts
Liabilities: reviewing whether and how your assets are protected from tax in various scenarios
Administration: helping you administer trusts
Selling a business: working to minimise your tax liability and take advantage of available allowances
Why choose S&W?
Our highly experienced tax professionals provide a personal service tailored to your precise needs, with timely and detailed responses to issues such as changes to tax legislation.
You’ll have a single point of contact, while our Blue Book provides an invaluable summary of all your financial assets.
What costs can we claim for R&D?
Businesses can claim for revenue-based expenditure for staff costs, utilities, consumables, software licences and some third-party expenses. For accounting periods starting on or after 1 April 2023, claimants may also include expenditure on cloud computing and data licences. Relief cannot be claimed on items of a capital nature, such as the purchase of plant and machinery, although R&D capital allowances may be available. Development costs capitalised as intangible assets may potentially be eligible to the extent they are revenue in nature for R&D tax purposes.
What are the potential benefits when making an R&D claim?
The amount of the benefit and the way it is calculated differs depending on the size of your company. Large companies can receive a 13% credit for eligible expenditure (20% for expenditure incurred after 1 April 2023). Small to Medium Enterprises (SMEs) receive an enhanced deduction that can be cashed out if the company makes a loss. This benefit can range from 24.7% to 33.35% of the qualifying expenditure identified (between 18.6% to 27% from 1 April 2023).
Depending on the company’s size and taxable profit position, R&D tax credits can be paid as:
- A corporation tax refund
- A cash credit
- An enhanced deduction to carry forward against future profits
What is the R&D claim process?
R&D tax relief is claimed within the company tax return. To claim these costs, the business must prove the eligibility of the associated activities. We can help prepare a report detailing how the eligibility criteria have been met, including:
- Advancements sought
- Uncertainties faced
- How these uncertainties were overcome
- Why the knowledge was not readily deducible by competent professionals
This report will be submitted to HMRC alongside your CT return, in addition to HMRC’s additional information form.
How far back can we make a claim for R&D Tax Credits?
Because R&D tax relief is claimed through a company tax return, companies have two years after the end of their financial year to submit an R&D claim.
What if we have paid someone else to perform R&D activities for us?
An SME can generally claim for 65% of the payments to unconnected parties. Special rules apply to scenarios where the parties are connected.
Subcontracted R&D expenditure is generally not allowable for large companies under the RDEC scheme.
Determining whether costs relate to R&D subcontracting or the provision of workers can be complex and may depend on the working relationship with third parties and contractual terms. It is worth speaking to our R&D Incentives Advisory team members.
Can overseas costs or activities be included?
There is no specific geographical restriction on R&D tax credits; the activities’ location does not affect eligibility. However, the government is considering restrictions on overseas costs for companies whose accounting periods begin on or after 1 April 2024.
These restrictions could mean R&D incentives can only be claimed for activities carried out in the UK or where workers are paid through a UK payroll unless material factors, such as environmental or regulatory requirements, mean those activities must take place overseas.