The Business Exchange Swindon & Wiltshire Edition 40: Dec/Jan 2018/19 | Page 11

FINANCE Accountant urges SMEs to take advantage of Research & Development tax relief Martin Gurney 01793 533838 Haines Watts Swindon is a firm of chartered accontants and business advisors based in Old Town. They offer audit, accountancy and tax and R&D planning services to owner-managed businesses, SMEs and UK subsidiaries across the South West Martin Gurney, tax expert at Haines Watts Swindon, is urging SMEs in Wiltshire to take advantage of the government’s research and development tax relief. The Haines Watts team in Swindon have already helped several local businesses access the relief – yet very few companies are taking advantage of it. Recently HMRC unveiled new statistics showing there were 39,960 R&D tax credit claims for the tax year 2016 to 2017 and the majority - 34,060 - are in the SME R&D scheme. Martin said: “It’s good to see the majority of claims are coming from the SME sector as this is the backbone of our economy in the UK. However only a fraction of those companies which could make a relevant claim are doing so. “Either business owners don’t know about this scheme or they don’t consider what they are doing could qualify for this relief. However many companies are doing innovative things to grow their businesses which could qualify for this tax relief.” Examples of activities which could attract R&D relief might be: • • • Productising a service eg. online courses to create a new income stream. Creating a new system or process to automate a part of a business allowing for growth. Integrating different systems to create a competitive advantage. “It’s important to take the proper advice,” Martin said. “Working with an accountancy practice which has the expertise and knowledge is critical before starting a new project to see if it qualifies and, if it does, to plan finances accordingly.” “We recently helped one new client, providing supply chain software, to claim relief for the continuing development and improvement of its software. Their previous adviser had suggested they were not able to make a claim.” R&D tax relief is a valuable way of rewarding companies which are investing in innovation, either to create something new in their field or to improve on existing technology. The HMRC figures also show during the tax year 2016 to 2017, £3.5bn of R&D tax relief support has been claimed, corresponding to £24.9bn of expenditure on R&D projects nationwide. A breakdown of the statistics show claims are concentrated in companies with a registered office in London, the East of England, or the South East. “These figures show clearly that the South West region is not taking full advantage of this type of tax relief. We are home to some of the most innovative companies in the country and yet the overall figures show most companies area not even exploring the possibility that they may qualify for this valuable government tax relief,” Martin said. Between the launch of the R&D tax credit scheme in 2000/01, and 2016/17, over 240,000 claims have been made and £21.4bn in tax relief claimed. To contact Martin directly to discuss R&D tax relief email: [email protected] FACING THE CHALLENGE OF RAPID GROWTH By Paul Holmes, PCH Business Support I have been working with a great little engineering company in the South West for about a year and this project has prompted me to write about the challenges of rapid growth. 07715008521 “Saying ‘no’ to potential business is culturally difficult, yet as the business has grown along with the overheads, so the customers must evolve too.” In this consultancy role, I’m supporting this company to prepare for the recruitment of their first general manager - a role I identified as being critical to the business moving forward. The company is primarily involved in distribution yet has grown steadily, introducing their own manufactured products in recent years. However, the success of the distribution side has not allowed basic systems and processes to be developed for growth and scaling up. As a result, the team is running at or beyond capacity so improvements and developments are on hold. The owner is dealing wIth constant questions from the team, firefighting issues, has limited time for strategy, making it hard to engage and develop new business. The scenario is very common in businesses which have become more successful. Fortunately this company now recognises it needs to change before the intensity takes its toll. Having identified the need for change, actually making a change is a very different challenge - when no one has time to stop. Working with the team, I have steadily progressed through all the possible areas for improvement, itemised and prioritised and now it’s time to implement! I am fundamentally challenging the way the business works, introducing key management meetings to analyse issues and start to focus the team’s interaction with the owner, moving towards more quality rather than constant questions. One tough challenge is to increase lead times temporarily, giving the team permission to focus on higher reward customers and allowing them to limit some of the smaller orders. Saying ‘no’ to potential business is culturally difficult, yet as the business has grown along with the overheads, so the customers must evolve too. The next step is to agree some time during each week, when every team member can work on improvements. The same has to happen with the owner too. Investing the time will be invaluable in the long term even if it may feel like wasted time in the short term. This process has required tough conversations, working in partnership, making effective changes to free up time and find capacity by improving the critical processes. It’s a real journey, yet one which will prepare for the company’s deserved future success – and protect it from potential failure. I’d like to therefore wish my client a successful and healthy 2019! For more info: www.pchbusinesssupport.co.uk THE BUSINESS EXCHANGE 2018 11