Stanley Carter - Page 4 of 7 - company secetarial services

December 20, 2017

How best to deal with your R&D claims

When it comes to claiming R&D tax credits, many business managers assume that their accountant is best-placed to handle the claim while they provide the technical input.

Tax credits, R&D, Research & Development, small business, tax relief — R&D for small businesses

Furthermore, there’s often an automatic assumption by many accountants that if they have the correct technical information, a claim is fairly straightforward.

Admittedly, the fact that any limited company developing new products, technology or processes may be eligible and can claim for up to two accounting years retrospectively, sounds straightforward enough.

But, even when a business owner or director feels he or she can identify R&D projects better than anyone else, scoping them in the context of the R&D tax criteria is not that simple. It requires technical understanding combined with an in-depth knowledge, without which the numbers might not add up.

Therefore, the reality is that presumptions can fall way short of the need for an in-depth understanding of what potential R&D activity may or may not fit within the context of the current legislation.

Take the meaning of R&D in the context of R&D tax relief; an issue that isn’t simple to handle. R&D in this case is not limited to the R&D department, as HMRC defines it as work that achieves a scientific or technological advance when scientific or technological uncertainty exists.

This can include achieving an increase in overall scientific or technological knowledge or capability; significantly improving products, processes, materials or services through scientific or technological development; or using science or technology to duplicate the effect of an existing product or process in a new or appreciably improved way.

For instance, a whole project might not qualify but the element addressing the technological uncertainty does. That can include planning and managerial activities in some instances.

To be sure a claim is justifiable and as beneficial as it can be, an accountant must fully understand the detail of the HMRC guidelines. That’s a 15-part manual and, once you have read through it all, you will need the technical expertise to define, quantify and support a claim.

This is where a specialist partner that lives and breathes R&D and has extensive experience in supporting companies in funding, resourcing and exploiting R&D would make the process more efficient and more profitable for all parties.

With Stanley Carter R&D, clients often find that the objective, expert evaluation and broader experience in supporting technology companies can fundamentally change the way they look at and approach their R&D strategy going forward.

For more information on how we can help you with your R&D claim send us an email on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

December 19, 2017

Things to consider if you not long wish to use spreadsheet to do your accounts

For many UK contractors and micro-business owners, the process of managing business finances has historically been a solid Excel spreadsheet and a lot of patience.

accounts, spreadsheet, Vat, HMRC, self assessment — Doing accounts using spreadsheet

But with an ever-changing small business landscape and the looming spectre of digital tax on the horizon, more and more people are looking past their spreadsheets and searching out more sophisticated technology to help them with their accounts.

Although technology is becoming increasingly sophisticated, we are not quite at the point where everything can be fully automated and your accounts just take care of themselves. So while software is designed to make the process easier, you still have to do some work too.

When approaching accounting software for the first time, the most important thing is to ensure that the information you are entering into it is correct. This includes everything from inputting accurate bank data (if you’re manually entering transactions rather than using a direct bank feed), and categorising your expenses correctly, right through to simply making sure your company start and year-end dates are correct. By doing this, you will avoid making simple mistakes that could cause you a headache with your finances down the line.

Bookkeeping is not the most exciting task when it comes to running your business, and it’s easy to let it slip down your priority list, especially if you’re facing the prospect of using a new method after years of your reliable spreadsheet. But the less disciplined you are, the more difficult it will become.

Take out a dedicated time each week to do your basic admin (such as inputting expenses, chasing invoices and reconciling bank transactions) and stick to it. By making bookkeeping a regular habit, you will keep on top of your finances more easily while getting better acquainted with your software much faster.

Perhaps the biggest obstacle that puts people off stepping away from spreadsheets and giving accounting software a try is the issue of data security. It’s certainly not a mistake to be concerned about this; data security is absolutely vital and any accounting software provider worth its salt will take it very seriously. These providers should be completely transparent about what they do with your data and how they store it, so take the time to do some research and put your mind at rest.

But if you are looking for new accountant that you can trust and give you impartial advice please send us an email on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

December 15, 2017

Our view on the proposals for a revised Corporate Governance Code

Governance code, banking, UK economy — UK Coprporate Governance Code

The FRC (Financial Reporting Council) proposals are a welcome move to improve corporate governance in the UK. The proposals place a much greater focus on organisational culture and employee voice, meaning that company boards will need to invest more time and thought on strategic workforce issues than ever before. This is a significant step forward in recognising the value of the workforce and the need for its voice to be heard at board level.

The FRC rightly recognises that in order to drive sustainable culture change and build trust in business, boards must focus more on values, behaviours and a wider stakeholder voice beyond that of shareholders, with particular attention to the voice of the workforce. We support the plans to encourage companies to enhance employee voice by either appointing a director from within the workforce, a formal workforce advisory council, or a designated non-executive director with responsibility for representing and understanding the wider workforce. No single approach can suit all firms’ situations so it’s important that there is flexibility for businesses in choosing an option that is most appropriate for them.

The proposal also broadens the role of the remuneration committee to oversee pay and incentives across the wider workforce rather than just focusing on executive pay. This is an important step in encouraging businesses to be more active in capturing and acting on their people data and for boards and the remuneration committee to improve their understanding and oversight of people data. Such a move will require fundamentally changing the role and makeup of the remuneration committee to ensure it has the right levels of expertise and necessary time and support to carry out its expanded remit.

We welcome the FRC’s efforts to evolve the UK’s corporate governance system and these latest proposals reflect many of the recommendations made in various consultations to government, including those directly linked to the UK Corporate Governance Code.

If you have any question on how this proposals may affect your business send us an email on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

December 13, 2017December 13, 2017

The new Accounting rules and the Banks

When launching or running a business, one of the most important responsibilities is to keep your finances in order.

Whether it’s hiring an accountant, opening a business account or registering with HMRC for corporation tax or VAT, there are a number of tasks to be done when you set up, and a bewildering array of banks, software companies and accountancy firms on hand to help.

UK Bank, UK economy — Bank in the UK economy

On 1 January 2018, a new accounting standard for how banks report on financial instruments, IFRS9, comes into force.

Financial reporting standards rarely sound exciting to non-accountants, but this one will have a real effect on banks and the economy. Impairment losses are the largest factor affecting bank profits, so changing how they are calculated will have a real effect.

Financial policy is currently going through a period of change, since fixing one problem can often prompt another. In this case, changes to a little-known accounting rule could well make lending to the real economy look very different.

Banks will now be required to estimate future losses on their lending. Come the New Year, they will be looking with great interest in ways to introducing new models to calculate “expected loss”. They will then have to hold larger credit provisions against this – in other words, even more rainy day money.

However, IFRS9 is no solution for all problems. In fact it may lead to volatility, inconsistency, lack of comparability, and the exacerbation of financial instability.

An estimate of future losses is just that; an estimate, and a highly subjective one at that. If a recession is predicted, these expected losses will accelerate, even if the current economic situation is gracious.

The requirement to hold more capital amplifies this, hence the increase in volatility.

But banks don’t like volatility, and their shareholders like it even less. This is therefore likely to mean banks change who they lend to and how they treat the customers they do lend to.

Any unsecured lending, for example, is likely to come under intense scrutiny. Banks won’t want to show erratic performance, so may reduce this type of business. There may also be particular sectors that show wide variations in loan losses. Banks will treat these industries less favourably too.

Comparisons between banks will be difficult, since their views of the future could be radically different.

The practicalities of considering several possible scenarios, calculating the probability of each occurring, and modelling the impact will be extremely challenging.

This may mean that banks intervene a lot sooner than businesses have been used to in the past. Businesses with some performance issues may find the bank manager knocking on the door sooner rather than later, perhaps to look at the prices of the loans.

In this way the standard could exacerbate financial instability, rather than countering it.

No accounting rule is perfect. But there is a misconception that IFRS9 will fix more than it can, and its shortcomings may become evident very soon.

Rather than creating technical issues over which accountants and analysts scratch their heads, this has the potential to influence how banks are perceived, with real knock-on effects to the economy and access to finance.

The more people understand some of the challenges in the new rules, the less likely we are to see businesses affected. This is why it is so important to increase understanding of what this change to the rules will mean.

If you think this will affect your business and require further information or help please send us an email info@stanleycarter.co.uk or check our website for further information www.stanleycarter.co.uk

December 8, 2017

Are you ready for the tax deadline?

For many people and businesses now it’s a time to find bank statements, open up envelopes of uncategorised receipts, put the monthly figures into accountancy software and, most importantly, work out where to get the money to pay the tax man as well as the accountant. This isn’t necessarily good news when there are also Christmas presents, parties and dinners to be paid for.

Sometimes whether you had a good year or a bad year, this time can be stressed and uncomfortable. Obviously accountants can help ease the pressure and work some magic and assist those that are less familiar with the process. For those that don’t have the time or aren’t good with bookkeeping the perfect solution will be to approach a professional.

There’s also cloud accountancy software available that connects to your bank accounts and you can download the transactions from your bank. You can then itemise them. The cloud element means that your accountant can also log on to your profile and tell you what you’re doing wrong and assist you further. It is very simple because your accountant won’t need to go through piles of invoices; the software generates all your invoices.

If you are a business and have to register for VAT or to become a limited company your accountant will be able to advise you. It all depends how well you business is doing if you met the threshold in terms of profit and turnover. Some business owners only focus on running their businesses but need to remember that they need to get to grips with all aspects of their money, but by using a trusted professional in a form of an accountant can help overcome fears of tax matters like VAT and other liabilities.

One of the best feelings is to have any worries about the looming deadline at the end of January. Most people don’t enjoy paying taxes, but they do enjoy having clarity about how much is owed to HMRC.

Stanley Carter have considerable experience in all aspects of taxation and business services, including providing a very cost effective payroll bureau service. If you want to arrange a non obligation initial meeting on any taxation or accounting matter please contact us on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

December 6, 2017

Accounting and finance professionals and the new automated roles

More than nine in ten finance and accounting professionals (92 per cent) are optimistic about increased automation in the profession. Despite the increasing role of technology, only 12 per cent believe their job will be completely automated within the next five years, with most seeing new tools

as an opportunity rather than a threat.

Emerging technologies are set to transform the finance and accounting sectors, with many professionals already feeling the impact on their day-to-day responsibilities, and it’s encouraging to see that, far from being intimidated or threatened by these new ways of working, the majority of professionals are excited and optimistic, believing automation will improve and expand their role in the coming years.

Couple that with a new corporate governance code that aligns the pay of top execs and workers. The code includes requirements for UK firms to ensure board appointments are “based on merit” rather than “group think”. It also proposes giving pay committees broader responsibility and discretion over exec remuneration and is more specific on what steps need to be taken when companies encounter significant shareholder opposition. Will be essential to restoring trust in business, attracting investment and ensuring the long-term success of companies for members and wider society.

If you require support and impartial advice please email us on info@stanleycarter.co.uk or check our website for further details http://www.stanleycarter.co.uk

November 29, 2017November 29, 2017

HMRC penalties to corporate Directors

The number of personal penalties levied by HM Revenue and Customs (HMRC) against corporate senior accounting officers (SAOs) remained high last year. The figures showed that HMRC was taking an aggressive approach to enforcement. HMRC office

Given the scale and complexity of the money flows in large businesses, simple errors in the finance department can result in mis-reporting and subsequent fines. Finance directors need to understand all the requirements set out by HMRC. The policies, procedures and systems in place to ensure tax compliance need to be carefully monitored to avoid the potential for mistakes,”

There are two types of personal penalty that can be issued under the regime: firstly, for failing to take steps to ensure the accounting arrangements are adequate; and secondly, for failing to provide an annual certificate either confirming the arrangement are adequate or disclosing details of the deficiencies. Accounting arrangements are considered ‘adequate’ if they enable all relevant tax liabilities to be calculated accurately in all material respects. Businesses can also be fined under the regime for failing to provide the name of their SAO to HMRC.

The total number of penalties issued under the SAO regime last year was actually lower than the number issued in each of the previous years.

If you have any queries about your tax or HMRC penalties send us an email on info@stanleycarter.co.uk or check our website for further information www.stanleycarter.co.uk

November 27, 2017

Changes to the UK Corporate Governance Code

The UK Financial Reporting Council (FRC) has confirmed it will launch a consultation on changes to the UK Corporate Governance Code.

Among the proposals, the watchdog said, would be the need for companies to link corporate governance to purpose, engagement with wider stakeholders, and consider how they benefit wider society.

The FRC added that it would sound out views on the future development of the UK Stewardship Code, including the extent to which the interests of wider stakeholders and broader social impacts, including environmental, social and governance factors were integrated into engagement and monitoring by investors.

The development comes after the FRC faced criticism from corporate-governance campaigners over claims that it had failed to enforce the requirements of section 172 of the Companies Act 2006.

Section 172 says company directors must not only run a successful business but must also take account of a wide number of stakeholders such as employees, its suppliers, the wider environment, and even the wider reputation of the company.

The FRC has revealed plans to conduct a series of targeted thematic reviews of company financial reports during 2019.

The audit watchdog said the reviews, which will supplement its routine oversight of financial reporting, will focus on four key areas. In its sights are smaller listed and AIM companies, revenue recognition, lease and financial instruments accounting.

The FRC said it planned to contact 40 small companies before their financial year-end and select two areas of disclosure from their upcoming reports and accounts for review.

The areas that the FRC will select for review, will be drawn from five areas that have been flagged up in recent thematic reviews or in Financial Reporting Lab reports.

The IASB has recently introduced major new standards covering revenue, leases and financial instruments.

Disclosures about the effects of Brexit are also on the FRC’s hit list.

If you have any queries about how these changes will affect your business please send us an email on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk

November 24, 2017November 24, 2017

UK Government Budget

UK Chancellor of the Exchequer Philip Hammond unveiled his Budget statement on November 22, under the new arrangement for the main annual tax changes to be announced in the autumn for the following year. Some predicted tax increases did not materialise, which will be welcomed by the wider business community.

Capital allowances

The temporary schemes for 100% first year allowances (FYAs) for purchases of zero emission goods vehicles, and for gas refueling equipment, which were due to end for expenditure incurred after March 31 2018, will now be extended for a further three years.

With immediate effect, there are some minor changes to the list of energy-saving technologies eligible for 100% first year allowances (FYAs). Lessors are not eligible to claim FYAs, but the use of hire purchase type facilities will allow customers to claim them.

The temporary scheme of first year tax credits (FYTCs) for environmentally beneficial capital expenditure, involving projects within a designated list of energy and water technologies, which were due to expire in April 2018, will now be extended for a further five years. FYTCs can be claimed by companies in a tax loss position, at two thirds of the corporation tax rate. The use of leasing facilities becomes a relatively less attractive option for potential lessees who could claim FYTCs while purchasing assets outright.

Vehicle taxes

Various income tax and vehicle excise duty (VED) changes are designed to promote environmental objectives. The diesel supplement for the income tax benefit in kind (BIK) charge for diesel cars not certified to the RDE2 standard will rise from 3% to 4% with effect from April 6 2018.

The first year rate of vehicle excise duty (VED) for new diesel non-RDE cars will be increased by one band from April 2018. Other VED rates will rise in line with the retail price index from next April.

Electricity provided by employers for the workplace charging of employees’ electric and hybrid cars will be exempted from BIK charges with effect from April 2018.
However, there will be no changes in motor fuel duty rates next year.

Some tax increases

There are some significant tax increases. In the taxation of capital gains by companies, indexation relief for inflation is to end in respect of changes in the retail price index after the end of this year. This will match the capital gains tax (CGT) rules for individuals, where indexation relief was removed in 2008. The ultimate impact of this change will obviously depend on future inflation rates.

A new move against cross-border corporation tax avoidance will target the use of favourable tax jurisdictions to hold intellectual property rights such as core product brands. The Chancellor proposes a new withholding-type tax at the income tax basic rate on royalty payments to associated entities based in low tax jurisdictions, by international groups trading in the UK. The change will take effect from April 2019, and a consultation paper on the details is to be issued at the beginning of next month.

Other steps against tax avoidance and evasion include:

a move against VAT evasion in online sales, making the marketplaces jointly liable with suppliers for unpaid VAT, from the enactment of the next Finance Bill;
a further strengthening of legislation in the 2016 Finance Act designed to tackle “disguised remuneration” of employees or quasi-employees for income tax purposes;

Other significant changes

For micro-businesses, the Chancellor announced that the VAT registration threshold will remain at annual turnover of £85,000 at least until April 2020. It remains under review for the longer term, and the UK threshold is low by comparison with other EU countries.

The rate of the tax credit for research and development expenditure is to be increased from 11% to 12% from January 1 2018.

Economic background

The Chancellor acknowledged that the UK’s recent economic performance has not been as good as previously expected, due to a generally stagnant trend in productivity. The latest official forecast is that the UK economy will grow by around 1.5% in each of years up to 2022, compared with earlier forecasts of 2% annual growth.

However, he still predicts a continuing gradual improvement in the budgetary position, having avoided major new tax increases or expenditure cuts in this Budget. Annual public borrowing, which rose to nearly 10% of gross domestic product (GDP) in the aftermath of the financial crash in 2008, is projected to fall steadily from 2.4% of GDP in the current financial year to 1.1% by 2022/23. Overall national debt is projected to peak at 86.5% of GDP this year (having more than doubled since 2008), then falling to 79.1% by 2022/23.

If you have any concerns about the last budget and how it will affect you or your business please send us an email on info@stanleycarter.co.uk or check our website for further details www.stanleycarter.co.uk