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
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