Proactive Tax Advice Spring 2020
This transcript about proactive tax advice in spring 2020 was created using AI and may contain some mistakes.
Hello, and welcome to this afternoon’s webinar where we’re looking at providing proactive tax advice in spring 2020 and proactive tax advice has changed because obviously Corona virus has changed so much today. I am joined by Simon Britton of quantify to look at proactive tax advice in the face of grown arts. So welcome to everybody who’s joining us here. And to those of you who are joining us on zoom.
And, but also those of you who are joining us as we stream, leave into Facebook, YouTube, LinkedIn, and Twitter. So if you’re joining us here, you’ve please. If you have questions as we go through this session, if you have questions, please ask them below in the chat box. If you’re joining us on any of the other platforms,
Simon has a very detailed, comprehensive presentation, prepared, have allowed some time for questions and answers. And if questions come in during the session, irrelevant Simon and myself, see them here. So we can have a conversation with Simon and I ask the questions for you. So if you’re elave here in the webinar with us, but if you’re any part of watching,
just put your comments, your questions into the comment box and the team are going to pick them up here. Now, the next thing is the presentation for this session and the slaves to Gord this session. So again, Jonathan is posting a link at the bottom of the page, either in the chat box or in the comments so that you can access your downloads and material.
And some of the questions we may leave to the end, but please ask the questions as they arise for you. What are the huge values of something like this is Simon is unquestionably a category of Harley Simon as a tax expert. You have somebody here as a captive audience, a captive expert. So Simon can answer your questions. When you ask a question,
everybody benefits Simon. Welcome to our webinar today. Simon, can you introduce a little bit about yourself first before we get stuck into the material and why people should listen to you? What does Simon Britton have? There’s going to be a benefit to accountants and firm owners. Yeah. Hi Daz. Uh, thanks for, thanks for having me and, uh,
hello everyone. I hope everyone’s, um, uh, not, not struggling too much with, uh, with lockdown and, uh, looking forward to getting back to work. Um, so yeah, so I’m, I’m Simon Britton and, uh, and so today I’m, um, uh, talking about tax advice and what we can do proactively to help our clients in the,
in the current environment. My background, I’m actually a, um, I’ve got a far too many qualifications that my CV reads like a sign of a waste of youth. Um, so I’m a ATT CTA solicitor as well. Um, so I’ve spent, uh, far too long specializing just in the world of tax and, um, and, uh,
in particular, in proactive planning, helping people, uh, generally or MBAs, um, look at their circumstances, look at the family or the business, and let’s, let’s make sure that we can get all of the, the various taxes that, uh, that come into play and get them all in sync. And so I’ve picked out a couple of a couple of the juiciest bits that,
uh, that I think that as a profession we can take to our clients at the moment and really be on the front foot. So Simon, you mentioned in there that you’ve also qualified as a solicitor and a very interesting combination. Did you spend long practicing as a solicitor or was another string to your tactics? Um, so yeah, I’ve, I’ve been,
uh, practicing as a, as a solicitor for, um, about 15 years of, of the last 20. So I’ve spent some, some time purely an accountancy firms sometime just in tax other times, uh, just in law firms. But, um, what I find this as a big disconnect between, um, the, the accountancy profession and lawyers.
And so I try and bridge that gap. And so when we’ve got tax tax thinking that needs to be implemented, that’s really where I come in and just make sure that, uh, that the legal work that’s done really sort of ties in with that. But then on the other hand as well, uh, I’m kind of also, uh, reinventing R and D tax services as a software driven,
uh, thing as well. So I’m doing too many things, Not at all. And it’s like the sign of the sign of an expert and an inquisitive mind. Um, and, and that’s what we want when it comes to tax advice, inquisitive minds. So folks, anybody who came in late and in the comments below are in the chat box below Jonathan has grouped the downloads for today’s session.
We’re just kicking off we’ve, we’ve just finished our introduction and we’re now moving on to the teaching space and which Simon is going to bring this show in the next 45 to 50 minutes through his material. And then we will wrap up the session. So Simon over to you, if you want to bring up your presentation and share your screen, Alright, let’s do that.
Um, so, um, uh, you know what, uh, if jr, if you’re still there, if you could enable screen-sharing, that would, that would be a big help That, that, that would be, that would be a big help. Um, so hopefully you should be able to do it there now. Yep. That’s the one excellent New features appearing every day on zoom and there’s new download.
So, so, so our standard operating procedures from yesterday are possibly redundant by today. Yeah. It seems that ties in with the government advice around, around handling with Corona virus just every day is different, but, uh, great. So, uh, so yeah, so, so we’re going to be talking to practice tax planning, uh, in,
in, in the current time. And, um, I flicked through far too many of the slides. Let’s just see if I can get back to number one. Uh, sorry. Right. Number two. Here we go. Um, brilliant. So let’s dive in. Um, so what I’ve, what I’ve done today is I’ve tried to pick up,
um, two areas that are really going to help your clients get money into their businesses. That’s gotta be the absolute top priority at the moment is how do we get money into businesses? Where, where people have had so much disruption through, uh, through the Corolla virus. Um, and, and I think overwhelmingly a lot of the businesses that I talk to say that they see the current,
the current time as a blip, they expect in six months, nine months a year for the world to sort of write itself and for it to be to an extent business as usual again. So what they need to do, uh, to, to bridge that gap is get some more money into the business and money, money that perhaps wasn’t in their forecasts,
uh, before the coronavirus yet. So we’re going to look at a couple of ways of potentially doing that. Um, what I really want to emphasize is all the Corona support that accounts are doing at the moment. It’s great. And, and definitely stick with that, do that first. Um, the, the government supports been, been very good.
Some of it’s been a bit clumsy and in terms of the implementation, but generally what they’re doing is, uh, absolutely should be the top priority. So, so what I’m going to talk about is what to do next, when you’ve done that, what do you, what do you do next? And it’s good to know that you’ve got a couple of things in there in the bank on the agenda to speak to clients about.
So we’re going to talk about suspensions, um, and then we’re not going to go too heavy. So it’s, don’t, don’t be too worried about that. And R and D claims, um, both of which are great ways of getting some money into businesses. Um, so yeah, Anybody that’s joining us here live on zoom folks, you can adjust your screen view options.
You can adjust your screen view options to make the slides bigger, to have Simon, to do a gallery view. So make sure I’m playing with your settings for every, or watching to get the view that you want. Great. Great. Um, yeah, so, so SASA is the first topic that we’re going to tackle. Um, this one is,
uh, it’s about business pensions, and so they’re really designed for MBS. Uh, so, so the maximum number of members that you can have in one of these is 11 members. So it’s, it’s, it’s designed for, for that smaller, uh, smaller type of business. Um, not for a fee, a huge client. Uh, there are other things that we can look at there,
but this is really good for most of the businesses that we tend to be dealing with. Um, uh, SAS, uh, just to explain with the terminology that stands for a small self-administered scheme and it’s different to a personal pension. Um, so a personal pension is, is heavily regulated, um, as it, as it should be by the financial conduct authority and all of the rules around personal pension relate to,
to the, the fact that it is an individual pension, one size has to fit all. And so, so there’s blanket regulation across, uh, across how they operate with the SAS, which is this small self-administered scheme, because that’s a business pension designed for MBS. It’s really, it’s designed to be handled by entrepreneurs. And so that, so there’s a different balance of risk and reward than you would have for,
uh, for just the one size fits all available to every member of the public type, uh, uh, personal pension. So a business pension, uh, has a couple of key features that, uh, that, that are really important for the type of planning that we’re going to talk about. Um, the first one is you can borrow 50% of your pension fund from a SAS,
and because they’re the people in this fast, the members also the trustees and they’re, so, so it’s the same person who runs the company is in charge of the pension and will benefit from the pension. Then the regulation here just allows you to sort of take, take more of a balanced risk and reward approach, and to look at your own business and think,
well, you know what, I’m going to lend half of my pension to my business because I backed myself to be able to make money using my pension fund. I’m going to make more money doing that than I am by investing in stocks and shares or whatever else. And, um, and so there were a lot of rules around what this loan has to look like.
And we’ll talk through those in a little bit more detail later on, but the other thing that you can do as well, that we’re going to touch on today is contributing a commercial property into the pension, and that’s a fantastically tax efficient thing to do. But the other thing that, uh, that’s really pushing this up, the agenda for people at the moment is that once a commercial property is outside of your company,
then in a pension it’s secured. And I cannot trust the environment if there were to be financial problems with the company in the next sort of, you know, two years, three years, however long, um, the, the property is actually safe when it’s outside of the company and then the pension it’s outside of the reach of crevice. So it’s,
that’s an important point that a lot of a lot of clients are quite reasonably concerned about just asset protection at the moment. And the SAS can help with that as well as giving it great cash boost and some tax benefits as well. So we’ll talk through, talk through those in a little bit more detail now. So, um, so I’ve put this up,
but accessing your existing pension funds, um, now accessing pension funds, this is a world away from liberation. We’re not talking about, uh, about pension liberation. We’re not trying to permanently strip money out of a pension. What we’re saying here is, is, um, that the money that’s sat in the pension, you can actually use that as work and capital in your business,
not all of it. So 50% you do have to still make sure that the pension is, uh, is well provided for, um, but, uh, uh, 50% of what’s in your pension pot, um, can, can be used in the business. And, um, excuse me, if you, if you look at, um, a typical situation might be that someone,
an owner manager might have a, have a business that’s out there. They might have squirreled away say 200,000 pound Indigo into a pension pot that sat there with the money being, uh, being managed by a financial advisor, and they’re getting a return on it. But, uh, but they’re not, they’re not using that money. And then, and typically people aren’t that excited about what whatever’s going on with their money so long as they’re going a return and the kept kind of up to speed on that.
Um, then, then yeah, then they forget about that money. But what they could be doing is accessing that. So if someone’s got that 200,000 pound, then this is way of them getting a hundred thousand pounds of it into their businesses. Working capital has to be repaired back into the pension, but, um, uh, over typically over a five year period,
but when the money goes back into the pension, the end of the they’ve lost nothing, uh, in terms of the value of the pension, but, uh, but they’ve had the benefit of that effective and very cheap money, um, in the, in the meantime and, uh, and money where they’re not having to go to the bank, they’re not having to explain their,
their business proposition and to cash flows and all that sort of thing, because they’re effectively both borrower and lender. It makes it very easy. So what I’ve sketched out Simon, does that need to be carried out by somebody independent are, if I’m the accountant to my client, is it appropriate for me to do that valuation? And those there needs to be a formal process and formal report here?
Absolutely. It’s a, the valuation, um, is that that’s something where I would actually encourage the, uh, the accountant that, uh, that’s dealing with the client here to be the one that puts that valuation together. It doesn’t have to be independent. Um, it does have to, has to have some substance to it, of course. Um,
but what we’re trying to do is, excuse me, just make sure that, uh, that the value of the, of the company’s shares typically would be the company shares that, uh, that there’s some security taken over for the, uh, for the pension, um, just at the Valley, at least exceeds the amount that that’s going to be borrowed.
So if someone, yeah, if someone in a typical scenario, I might have 200,000 pounds at a pension wanting to borrow a hundred thousand, we need to have a valuation that says that the shares are worth at least a hundred thousand. So it’s a, it’s not a, it’s not the sort of very far reaching valuation exercise that, uh, then sometimes needed.
Um, this is one that, that really, um, can be done by someone that knows the business very well and follows a sort of fairly standard methodology and putting that together. So, yeah, so, uh, but the very steps involved, um, the, the longest part is getting the stuff set up. So that’s something that the company needs to,
um, engage SASA advisor to, to, uh, to set that up typically takes three to six weeks. Um, a lot of that just depends on how complex the, uh, the applicant’s tax affairs are, but if you’ve got a fairly straightforward a tax record, then yeah, we would expect, uh, to, uh, pretty quickly at the moment the revenue doing these sort of three to four weeks,
sometimes it does stretch out a bit longer, uh, and, and odd cases sort of history, then, you know, it can take sort of a couple of months, maybe three, but that, uh, that sort of time period is, um, is what we usually say for people to budget towards. Um, so, so if you are looking to get corporation tax deduction on,
on pension contributions, um, then you need to factor in that sort of gap and they start this process a good couple of months before the year end. Um, but yeah, so, so sending assassin is reasonably straightforward, not massively expensive. Um, that’s something that, uh, that, um, uh, my business can, can help with,
um, uh, taking me through that process. And also most of the rest of the implementation of this, um, sasses are often something that it’s in that sort of dark spot where people are aware of it and probably did some of it in their exam. We’ll have read some articles on it, but actually implementing these things. Isn’t something that many of us as,
as advisors, um, do you want a day to day basis? So a really, that’s a, that’s where sort of sass floor, the, uh, one of the hats that I’m wearing today, um, the that’s the one that, um, sort of, uh, implements this everyday as, and can make this really smooth package. Um,
so once the SAS is set up, then it can get a bank account, um, that, that usually takes a week or two. So again, that’s sort of just slows the process down a little bit. Um, and then once the bank accounts set up the personal pension, so if people have got money just in a normal pension or in a sip or something like that,
um, if that’s the funds that they want to access, we can move the personal pension funds into the SAS. And at that point, you’ve got this ability to lend it into your own company and also make whatever other investment decisions you want within the bounds of the regulation. Um, but, uh, but it’s the, the owner manager themselves that would be the trustee and would be able to direct their investment strategy,
which might well be that I’m going to borrow half of the money back out in my own business. And the rest of it’s just going to get reinvested where it was. And that’s, that’s fine, um, to allow the loan to take place, there needs to be some security. Um, typically that’s sort of the shares, but it might bill for a property.
Um, so there needs to be valuation exercise done on that just to satisfy the, the trustees that, uh, that they, uh, that the security has the valuation, uh, enough of a valuation that covered the, the extent of the loan, uh, that exercise is normally overlapped with setting up the sauce as, as it’s, um, drafting up their,
um, the pension, um, uh, loan agreement, um, which, uh, which is on fairly standard terms or the interest rate can be, can be set, um, either high or low, depending what you want to do. Typically we would suggest, um, putting it up the, the upper end of the sort of bracket of reasonable,
um, rates up because the company is going to get a tax deduction on the, on the interest and the pension’s not going to pay any tax when it receives the interest, the company grants security over chairs, which again, that’s a process that we take care of that that’s overlapped as soon as they, the loaner send it into, uh, that paperwork’s ready to go.
And that, and that can be executed at the same time. And then 50% of the pension value is transferred into the business. Um, so as soon as the money is available and the paperwork signed that bank transfer can happen same day. So actually this is pretty good, pretty quick way of getting money that into the business that, you know, you’ve,
you’ve gotten a background that’s not, not otherwise being employed in pops as, as good a way as you could. If you had it, You said something that’s really critical a few minutes ago, and it’s about, I would describe it as sticking to the knitting and sticking to what we’re good at. Um, so I accountants have core competencies. Some people are different competencies,
but knowing what our boundaries and our limits are, Yeah. Doing something like this, what are the risks? Where does this go wrong for somebody like me, who’s not an expert in SAS and hasn’t been through the process, maybe only has an academic knowledge, what are the mistakes that people make and what are the horror stories that you’ve seen? So there’s,
um, sauces are sort of fairly tightly regulated. There’s only certain types of investment that you can do with them. And, uh, and you have to make sure that, uh, they’re there that you’re sticking within the regulations. Um, if, if something goes wrong, then yeah, the penalties are Savage. Um, so, you know, there’s no,
no point pretending otherwise, um, this, this isn’t something to, to try yourself. Um, so, uh, so there, there, there, there are advisors out there myself included that can, uh, that can, uh, steer people through this. Uh, w probably the principles are great, um, but actually getting the implementation, right.
Um, that’s the, that’s sort of the best way you’re going to save yourself from ending up in hot water. Um, the w one of the, one of the, uh, areas that people fall down on a lot is with this type of arrangement where, where a is being made from the, from the pension into the company, you actually have to repair that long.
Um, it has to be done with, with an interest rate. The interest has to be paid as well. You’ve got to make at least on your repayments on that couple of, in interest to get it back. So you can’t just lift the money out of the pantry. I forget about it, uh, that it has to be, has to work through properly.
There’s lots of, of, uh, as you’d expect, uh, returns and the regulation that there needs to be met. But, um, but yeah, working with someone who does this as their day to day job, um, someone who really knows the rules inside and out, and it’s got their finger on the pulse, that’s, that’s where you stop yourself from going wrong.
Um, so say, I think it’s a case of, uh, just, you know, pulling in the right people for the right, for the right roles. And this is one of those things that if it’s not something you’re doing every day, then give it to someone who is doing it every day. Um, I think typically the way that I see,
um, um, the accountants performing best when they’re doing, um, tax planning, they involve something slightly off the beaten path. It’s really be aware of the opportunity. And then to have that relationship with the client, to be able to say, I think this could work for you. And then it brings someone in who can implement it, but to work together,
to make sure that, that, uh, that we’re not just implementing something standard, we’re implementing something that’s really just tailored to, to meet the exact needs of that client. Um, so, so, yeah, just to finish off on this slide company has to repair that loan plus interest, and that’s typically done over five years. So this one would run through an example of work example if this,
um, which, um, uh, on one take very long to, to run it through. But, um, but I think it’s useful to kind of bring it to life and illustrate a bit. So David, um, had, uh, 200,000 pounds in a personal pension, uh, in a sip. Um, and so not money, um,
sorry. Uh, his company has 75,000 pound borrowing on a machine and he’s paying 8% interest on that. Um, so that’s a pretty typical scenario. Um, so to, to tackle this, what he does is sets up the SAS moves the money from the pension and the SAS, and then lens, um, half of it there. So a hundred thousand comes from the SAS into the company,
and that’s at a 10% interest rate, which you could, it could have been higher or lower, but we could pick 10% of there just to get some money back into the SAS. So they’ve reaped, sorry. Dave’s company repays the borrowing on the machine. So that’s 75,000 pounds repaid. It’s effectively replaced the barn, the external borrowing with borrowing from his pension.
Um, so it’s that hidden trust. It’s no longer leakage that interest is now going into his pension and it’s there for the future. Um, and then he also, uh, paid himself a bonus of 25,000 pound. Um, so he’s personally, um, quite, quite happy as well. That’s taxable obviously. Um, but he can’t fund a pension contribution with that if we wanted it to.
Um, but, um, yeah, so something like this congest, uh, where, where there’s an obvious benefit for the, for the individual involved, you know, the business is going to be better off, but also, you know, if he manages to get a little bit out of it himself along the way, um, then that’s something that clients really do value in difficult times.
Um, and that, that quite often is something that could just be long back into the business to clear an overdrawn director’s loan account, or just to create a credit on a director’s loan. Um, the longest three paid over five years. So there’s 10,000 pounds worth of interest that’s paid into the, into the SAS that’s received tax free. So the sauces got that 10 grand that gets invested for the future as well.
So, so Dave’s pension cause now looking, um, has as healthy, if not more healthy than it was before the business is better off than, than he’s personally, um, had that bonus as well. So it’s a nice little love come there for everyone. And that’s something that can be, uh, set up an implement it pretty straightforwardly. Um,
When we go back to your previous slide, you’re talking about in total, in total, you’re looking at, from start to finish, you can probably get this done in 12 to 15 weeks. Yeah. I’d say the quickest that I’ve seen this particular variant implemented was probably about five weeks. Um, but then yeah. Um, Oh, the other ones,
if the revenue is slow setting up the scheme and then if the people that are the current pension provider, if they’re slow, um, allowing the transfer of money across then yeah. You can’t be looking at something like probably 15 weeks. Um, Is it beyond the scope of today’s presentation Simon to toggle it? The restrictions on the SAS in terms of general,
you said are quite tightly regulated and there’s only certain things you can invest in certain things you can do. Am I opening up a can of worms by asking that question? No, no, no. It’s um, well, yes, but so we’ll answer it briefly, but I want to give people sort of the awareness, there is an awful of,
uh, of, of, uh, subtlety and nuance to the, to the rules. But, uh, but broadly what we’re looking at is it’s gotta be a proper investment. So, um, so you, I mean, you can’t spend the money on cars and holiday homes. It’s gotta be something where it’s generating an investment return. That’s really designed to,
you know, the, the, the investment has to be something that’s designed to, uh, to provide you with a pot of money in retirement. Uh, commercial property is brilliant and we’ll talk about commercial property and the pension, uh, on the next few slides. But, um, but yeah, commercial property is a cracking investment to have in this kind of SAS.
You can’t have residential property. Um, and then, uh, the, the, the other thing that people do a lot with it, so loans to third parties. Um, so you might say you might see a third party, that’s offering an attractive interest rate. Um, and again, that’s something pretty common on property developments. Uh, stepping in with a bit of finance can often be short,
um, and generate good returns. So that’s something that, uh, that people doing a lot with this lending money in your own business. That’s fine. You are allowed to do that with the sauce. You’d never be allowed to do that with this sip, um, and some, and then investing in stocks and shares and the, in the usual way,
uh, that that’s allowed to. So yeah, it’s gotta be, gotta be a proper investment and, um, and yeah, no, no residential property in there. So it’s not by to that. Um, if you ask about the student property, that’s where we get into a kind of arms kind of area civil, we’ll leave that one for another time.
Um, but yeah, if anyone wants to sort of, you know, explore particular, um, you know, can this be invested in, cannot be invested in very happy to do that separately or afterwards? So, yeah, we’ve been through, through the examples. So the next one that I want to do to look at this is moving a commercial property into a pension.
And the aim of this, uh, is both the security aspect that I touched on earlier, um, to, to make sure that the commercial property is safe from creditors, if anything was to happen in the future in terms of the financial stability of the company, but also the, the tax relief that you can get on moving a commercial property into a pension is massive.
So, uh, so this is something that’s often awful luck. Um, if a, company’s got a commercial property in, on this balance sheet and the company, uh, then yeah, w if we move it into the, the pension, then I’m going to talk through how we, how we do that and how we get a corporation tax deduction on the value of that property.
So, again, just to start off, the company has to set up a suspension. So you’re looking at the three to six weeks, they’re going a valuation of the property that can be overlapped with that. Typically it takes two or three weeks to get, to get a valuation done. If anyone knows the value of they can do a valuation quicker than two or three weeks,
then please give them my number of valuations. D D tenants seem to take longer than necessary. Um, the, the pension makes it, uh, sorry. Uh, the company makes a pension contribution. Um, that’s equal to the property of the Valley. Now this is, this is something that, um, that there’s a prescribed methodology for making this type of,
of pension contribution, where we’re going to move the property into the pension. This is the process. So you have to do a pension pledge that’s for an amount of money equal to the property value or going above or below. But, um, but, but broadly equal to the property value. So if you’ve got, say 500,000 pounds a property, we’re going to do a 500,000 pound pledge of,
of, of money to the, to the pension. Um, but then shortly after that, the, the trust of the trustees would accept an offer of the property to satisfy that cash debt. And, uh, and so we’re not, we’re not contributing the property directly. We’re not saying that the pension, please take this property. I’m saying, please take this property to satisfy that cash debt that we owe you.
And that’s a, that’s a methodology that, uh, that, uh, is different to what’s called an in specie contribution. Um, if you, if you’ve looked at pensions over the last two or three years, you’ll have seen that in specie contributions as something that the revenue is uncomfortable with because of the valuation issues. So, uh, so the revenue has actually set out this way of doing things where we can,
uh, can transfer property into pension using using this approach. Um, and, and this says, this is, um, something that you readily accept and, and have, uh, given clearance on there that this is an appropriate method of doing it. So when you’ve done that, you’ve made a pension contribution of say 500,000 pounds. So you would then get your corporation tax deduction on that pension,
your contribution, but, um, pension contribution tax deduction is absolutely standards, nothing controversial about it at all. Um, there, there are some rules about the timing of the pension contribution, uh, sorry, the timing of the deduction that you guys, um, depending on whether you’ve made contributions to a pension over the last year, um, and depending on how,
how big it is broadly, if it’s a contribution up to the value of 500,000 pounds, then you can get all of that deduction in one year. If it exceeds that, then you might have to spread it over two or three years. If it’s a contribution of over a couple of million pounds, then yeah, you’re going to have to spread that out over three years,
but, uh, but you do get the full value of, of that, um, of that tax deduction. So, uh, typically what we find with most businesses that we do this with is the, actually the, the property, uh, Valley, um, is more, um, usually more than double the profits of the business, uh,
for the type of family managed businesses that are there, that they would turn it to deal with on this. So that means that, um, the, when the punching of contributions being made, when you get to the year end, the tax liability for the current year is going to be completely wiped out. And then you can actually carry the tax loss back in the last year and recover some tax that was paid last year.
So that will get repaired by the, by the revenue, to the company and the usual way, so that can have serious cash difference to the, to the company. And again, I, I’m sorry to come in here with the negative questions again, Simon, I do, you know, I am an accountant. I am an actual real life accountant.
So I tend to look at things from all sides. And I look okay, upside. This all sounds really positive. What’s the risks here. Like I am actually seeing a double positive here that it’s, it’s protecting. So there’s a tax saving. It’s protecting an asset in the company that may be coming into a period of distress. What is the downside that I’m not seeing?
Obviously there’s obviously there’s implications of moving a property owned by a limited company into a pension form. I’m sure there’s more restrictions on getting it out and liquidating us well, what are the other risks and what are those sites? No, yeah, you’re right. Uh, so, so they, when the property is in the pension, then, then yeah,
it’s, it’s in, it’s in a different place doing different things. Uh, the, the, the downside that you, that you’ve then got, um, is that, um, the, the company is going to have to lease that, uh, that, that property. So it wasn’t previously paying rent on the property, but it is going to have to pay market rent to the pension.
So, so you have a little bit of extra cash. It’s going to have to keep going out, but that’s cash. That’s coming out with a company and a tax deductible form and ending up in the pension where you’re not paying tax on it. So it’s, uh, I bought it. So, So, so, so, so it’s a downside,
and now we have this cash outgoing every single month, but on the upside it’s cash, that’s ultimately coming to us longterm, tax-free building the nest thing for the future. Absolutely. Absolutely. So, I mean, the, the, the other downside, the one that, uh, that we’ll need to sort of flag up, um, is the effect on the balance sheet.
You know, if you bounce sheets got a commercial property on that, then, then that’s, you know, that’s, that’s, that’s great. It’s going to boost your balance sheet. If you take that off and put it in the pension then yeah. Normal, normal scenario is that’s going to reduce your balance sheet, uh, significantly. Um, and also in the year that you make the pension contribution,
um, that, that, that gets set off against your profits, which is where the tax saving comes from. Um, but if, if in one year you’ve hit the balance sheet in a major way, and you’ve wiped out your profits, and it looks as if you’ve made a significant loss, then yeah. Cosmetically, that’s something that, uh,
that, that, you know, uh, businesses might need to, uh, to, to bear in mind how that, how that looks, uh, I mean, obviously we are just taking, uh, taking that asset and moving it from one place to another. It’s all still in the control. And so, uh, so, so commercially,
we’re not sort of significantly changing, uh, the, the position, but, um, but in terms of how the accounts look, the client needs to be really, uh, aware that, uh, that it’s gonna, it’s gonna look like they’ve had a bad year when actually what they’ve done is provided, um, provided that, um, security for the future and,
uh, and, and, uh, bought themselves a big tax benefit as well. But, so, yeah. Should we just run through an example of a little quick one just to, to, uh, sort of bring it to life a bit? So, uh, so yeah, Jeff, uh, Jeff co, um, and you can probably guess the owner of Jeff because Jeff,
uh, Jeff co owns the industrial unit that it operates from, and it’s got a current value of half a million pounds there. Um, so it starts to set up and using that methodology that I talked through earlier, uh, the, uh, pension, uh, takes the ownership of the, of the unit there. Um, and then Elise’s put in place,
um, so that the company can carry on using it. The company gets a tax deduction of half a million pound in the current year, which is on that pension contribution. Um, so his profits, um, the company’s profits will say 250,000 pound. So yeah, um, the, the current, uh, profits are completely wiped out, um,
by the, by the size of that pension contribution. So he’s going to save the, uh, the tax that he would have otherwise had to pay on that. And then he’s also got another 250,000 pounds worth of profit, sorry, tax deduction that he could carry back in the last year recover last year as tax that was paid. So not only is he not going to pay a 50,000 pounds in tax for this year,
his profits, um, it’s also getting back 50,000 pounds that he paid in tax last year. Um, and so, yeah, so, so, so that’s a really nice position to, to end up in, but, uh, but what’s even better is this next example. So a lot of, um, a lot of people, um, have been advised by their accountants,
um, and very rightly in a lot of cases, not to have the commercial property in the company, because if, if something goes wrong with the company, then the property is theoretically at risk there. So a lot of people have got the commercial property that the business trades from they’ve got that health personally. And, um, and yeah, and,
and, and that’s, it’s not, it’s not an amazingly tax efficient position to be in because if the company’s paying rent, then you’re paying income tax typically at a higher rate on the rent that you receive than the tax deduction that the company is claiming on it. So, so, but that’s usually not a big figure that, uh, that, that,
that, uh, that we worry about that, but we’ve got an opportunity in that scenario where the, whether shareholder director shareholder owns the property personally, outside the company, what we can do is actually move it into the company, then move it onto the pension. And by, by bouncing it in the company on the weight of the pension, um,
then we got w we got even more tax relief. So it, it gives us the chance to create some income tax savings, as well as that corporation tax deduction, which is the same as we just run through. In the last example of do this again, I get set up the property, valuation gets carried out. The company buys the property from the owner.
Um, and, uh, and so to do that, typically the, the company is not going to be stuck with all that money, just sat there. Um, so a director’s loan account was created where just the purchase price is left outstanding. Um, the company then follows very much the same steps as in the last example where the pension contribution has made that pledge is satisfied by the transfer of the property.
The company claims it’s big corporation tax deduction, but, uh, but then this is the sort of extra bit there there’s like downside on this route is that the owners then left with a couple of gains tax liability on the property sale. And, uh, and obviously if the, if the property is worth a lot, and there’s a big gain there,
then that can be quite a sizeable, uh, capital gains tax bill. So that would be June 31st, January in the year following the tax year in which this happens. Um, but the owner is that left with the director’s loan account. Um, they can draw on when the cash is available in the company. Um, and that’s, that’s taxed money in effect the capital gains tax that’s paid,
um, on the, on the sale of the property from the person to the company that, uh, that means that that DLA has in effect is being taxed and then loaned back to the company. So you can take it Once you, once you have, once you have the adequate cash reserves in the company to pay the capital gains tax labor, there’s the,
by the time of the applicant’s tax liability, your director’s own account then becomes a draw, but asset tax free in the hands of the directors. Yeah, yeah, absolutely. And if you, if you’re otherwise going to be taking salary or dividends, uh, from the, from the company, um, then if you, if you can replace that,
um, withdrawing on the CLA, then that actually get you paying complicates tax at a much lower rate than you otherwise would be on pulling money out of you, your company. So this works really well for companies where it’s got a, you know, small family shareholding group. Um, if you have got, if you’ve got multiple, um, shareholders,
uh, there that aren’t necessarily connected in that way, then this needs a bit more structuring, but if it is a, you know, fun family business, family group, um, shareholders, then this works really. And the other thing is the property is really just moving true live with the company because it’s amazing. It’s, it’s moving from personal ownership into,
but then it’s immediate thing of yonder the pension. So it is protected, but obviously we’re back to the same issue. It’s well, in my own name, I’ve got much more flexibility as to what I do with that property. Whereas once it’s put in the pension fund, I have limited freedom And, and less flexibility. Yeah. Um, yeah.
Well, if you wanted to do something with that, probably when it’s in the pension, then you need to make sure that you’re not sort of stripping any value out of the pension. So you could buy the property back, Alan’s a pension, but then you need to have the cash to be able to do that. Um, so see when the property’s in the pension it’s,
um, yeah, you have meant that contribution on value is locked away in the pension. And, uh, and, and you are in a more restricted environment there. One thing strikes me, Simon, as you speak, is this, I’m like, this is absolutely fabulous in terms of opportunities. It’s, you know, it’s creating options. It’s giving us opportunities that’s relevant to right now,
but it also does strike me that whatever you’re doing here really does need to be part of a bigger strategy, a bigger wealth plan. And that you’re, you’re looking at not just this move, which you’re looking at the next move of possibly to move after it, to assess the implications of the longer term plan as in the 10 50, 20 year plan.
Absolutely. And, uh, and suspensions are very good for inheritance tax planning as well. Um, so, you know, if you think very, very long term, uh, we do usually say, you know, if you can draw on your pension last, because when money’s in your pension, it’s, it’s, uh, outside of your estate for inheritance tax,
if you start pulling on your pension, you’re pulling cash into, into your estate. That’s potentially, I didn’t, I didn’t verbally that straight out because I’m not an expert in this area, Simon, but that was actually where my thought process was going. If we have a property here, and then we put it through the company creating a director’s loan accounts,
but then it goes into the pension fund. And like, obviously, no, nobody is planning their ultimate expiration, but how many, like how many years does it need to be in the pension fund before it can be passed on, like, is this something that maybe somebody who’s, who has of ill health, who kind of, they have a definitive timeframe?
Is this, is this a, another opportunity? Is this an opportunity far effective tax planning into the pension into these days? Yes. Yeah, it is. Um, if someone’s in that position, then it, it does need to be, uh, does need to be dealt with, um, you know, fairly carefully, any, any kind of,
um, know like death bed or fairly short run and planning in those sorts of circumstances needs to be dealt with really, really carefully. Um, and one of the things that we need to do is just understand the circumstance of that person and the family what’s the next generation can have kind of a need in terms of access to cash, uh, in terms of protection for the future.
So I wouldn’t say that this is necessarily the GoTo solution there. That could be all sorts of things that we need to take into account, but yeah, if you’re in that scenario, this is something that’s worth considering. And in some cases absolutely will be the right thing to do. Um, the, one of the things that I wanted to touch on with,
with S is a lot of people will have questions around the, uh, the, the personal, um, the personal pension contribution limit to 40,000 pounds per person per year is the maximum that we can put in. And then there’s also, um, a lifetime, uh, maximum amount that can go into a personal pension, which is the 1,055,000. Um,
it was don’t apply to, uh, to a SAS pension. Those are personal limits. And as I mentioned before, this is a business pension. So, um, so business pension, where it’s got more than one member, uh, can have something called a general fund. And that allows us to, to make contributions from the company into the pension,
which are held almost in a suspense account when the pension contribution has been made by the company, the corporation tax rules that allow that deduction, that tax deduction to be claimed the actual allocation of that money from the pension, um, sort of suspense account into people’s individual personal, um, allocations, that’s governed by this 40,000 pound a year car and the million pounds lifetime allowance,
but the pension itself can receive, um, a huge amount of money. And, uh, and then it can have, uh, it can have that money sat in that suspense account potentially indefinitely. Um, the, the earmarking of the fund into people’s individual accounts is capped at about 40,000 a year. So when we do this, we, we have to,
we have to bear in mind, you know, we need to make those allocations over a number of years to make sure that when people have retirement, they’ve got, they’ve got the maximum they can possibly have, uh, in the, in that pension fund. But yeah, if people are concerned about some that these limits are going to, how can you contribute a commercial property into a pension,
if you, if you’ve got that 40,000 limit, um, that limit, again, it doesn’t apply here a totally different set of rules, but, um, yeah, let’s, uh, let’s, let’s run through this example just to sort of bring that to, to excuse me, to bring that to life a little bit more. So, uh,
Vicky, either you can tell I’ve been using my imagination when I’ve named these, these companies for the example, uh, Vicky’s got a company called Vaco. And so, so she personally owns that unit. The company trades from it is 250,000 annual rent tends to be 10% of the, of the value of the property. So 25 pound annual rent. And then because she’s a high rate tax patient,
she’s paying 10,000 pound a year tax on that 10 grand a year leakage. And we’re going to try and stop that. Uh, so a company has regular profits of South hundred thousand pound a year. Um, she sets up a SAS, acquires the property transfers. Uh, the company acquires the property transfers into the SAS. Um, and that leaves her with in this,
in this example, it’s a a hundred thousand pound gain. So she’s got a 20,000 pound CGT liability. That’s the equivalent of two years, um, tax liability on the, on the rent that she’s been receiving. Um, so, so in the scheme of things, 20,000 pound tax liability, but it’s not, not that big compared to, to the tax that she has been paying on the rent.
Anyway, the company claims that at 250,000 pounds corporation tax deduction, so that reduces the current year tax liability to zero. And then she’s going to get 20,000 pounds, um, reclaim, uh, from last year. She’s also still got 10,000 pounds of tax savings next year, too. So total tax saving 15,000 pounds, the SAS then receives that market rent.
So that’s 25,000 pound, um, rent. That’s going to go into the SAS. So every year she was receiving that, and now the SAS is receiving that. So, so we need to do something to, to readdress that balance, to make sure that she’s not personally out of pocket through this, um, while building the pension pot. So what she’s going to do there is replaced the lost rental income by drawing on her director’s loan account tax free 15,000 pounds a year that lasted for the next 16 years.
So over that time, a lot of money goes into the pension and, uh, and we ended up in a really, really nice tax efficient possession. So CA if someone, if someone’s in that position where they can do this, this is a cracking Bev of planning for them. And in terms of fees, this is, this is not high watering in terms of fees either.
So, um, what I wanted to touch on next, um, is R and D claims and lockdown. Um, and, uh, I’m conscious, we’ve not got a huge amount of time. Um, so, so I’m going to hit this sort of fairly fast, and then hopefully we can deal with some questions around the, the pensions and the R and D.
Um, if anyone’s got any questions, we’ll be able to turn to those then, and sort of five, 10 minutes. Um, but yeah, so, uh, I’m sure everyone’s familiar with, uh, research and development tax relief claims. Um, they are a great source of money for innovative businesses. Um, the, the, the way it works is you identify,
uh, some, uh, scientific or technological uncertainties that our company’s been tackling as part of its business. And then we can claim a tax relief on part the cost. So in effect, it’s a, it’s a way of getting by part of those research and development costs. And it’s administered through the tax regime. The claim was actually put in on the CT 600,
which means that, although typically this might be something that you’d expect to see as, as a, as grant funding opportunity, but it’s something that as accountants, we, uh, we administer through the, through the tax regime. Um, it’s not something that I, um, I don’t actually handle people’s tax returns for that. I always think that’s best done,
um, by them, by the accountant, that’s dealing with the rest of their, of their, uh, company’s, uh, affairs. And, um, and so, yeah, just want to kind of run through a few, few points around this. Uh, there’s been quite a, quite a bit of, uh, of charts on the forums and in groups,
uh, about R and D claims being a lot harder, um, and locked down, um, because a lot of discussion of, well, you need to go and visit the client. You need to really get to know the, the, the business to be able to do one of these properly. I just want to dispel a few myths here,
um, because there’s a, a culture has been built up around R and D toxifies that, uh, that makes it seem more difficult than it, than it has to be. Um, the, the, the most important point that I want to get across to you is, um, that the quality of your records is key in the same as for any other,
um, aspect of, of tax advice or accountancy work. Um, the quality of records absolutely essential. Um, there are far too many assumptions that are made in R and D tax relief claims and, uh, and the revenue really cracking down on that. So, uh, so we want to see some really nicely presented, um, records that just establish that evidence based that,
that, that explains the claim so that, uh, so that if someone looks at the claim and in due course, then we can point back at these records and said, that’s why the claim was that, that specific figure there. And, uh, and the quality of those records is really important. The, the service that I’m going to talk about briefly as a,
as a software platform that, uh, that, uh, that I’ve built, um, while my developers have built. And, um, and that’s designed to, to get those records, um, in place really, really well. And it’s something that, uh, it’s a software as a service product. So it’s actually designed for the client to be in the driving seat of doing all that,
um, putting the data in there and, uh, making sure that we’ve got, uh, got the right records. One of the most important things would that the revenue asks about when they do a mega inquiries, is this start and end dates of you projects. So then they like to see that the companies have got a few different projects going on rather than just saying,
well, it’s 10% of everybody’s role in the business is to do some sort of, uh, that’s, that’s not good enough, never has been. Um, and, uh, and that, that sort of percentage basis that, that people use when they’re making R and D claims, it’s, uh, it’s, it’s going to come to an end.
Um, instead it’s gotta be a defined project with a start date and an end date. And if you can describe those as well, and explain why you’ve picked those dates, then that’ll go a long way to satisfying the revenue that you understand the rules and that, uh, that you’ve actually applied the proper thinking in terms of how these projects, uh,
uh, described. And the other thing, uh, that, uh, that that’s really important to explain here, as well as the revenue and looking for one or two page narratives that not looking for 20, 30, 40 pages of, of jargon and technical language that, uh, that they don’t understand, um, you know, clients don’t want to explain,
you know, the, the, the intimacies of all of their, uh, of, of all of that sort of technical knowhow to, to anyone let alone to a tax inspector through the form of this kind of report. And it’s really not necessary the revenues a view on this. Cause they’ve got a pretty simple checklist. It’s got a few things need to be text four questions on there.
And if you can’t explain why a project, much as those requirements in, in one or two pages, then that’s actually something that brings the alarm bells for the inspectors. When they’re looking at it going, what you’re trying to hide here, why have you given me 20 pages of, of stuff on this? Um, so, so yeah, if,
if you’re looking at, you know, how can we do a claim and lockdown if you think, well, I need to get one or two pages of narrative per project, then that actually that’s a lot more achievable. That means that it’s something that you can do. Um, sensitively, if you’re asking the right questions and you’re getting the right information from the client,
it’s something that can be done remotely. And, uh, and again, uh, the, the software that, uh, that, uh, I’ll talk about, that’s something that allows the client to actually input a lot of that data for you. So that the conversation that you’re having, isn’t a fishing expedition with the client, and you’re actually talking about,
you know, can, can we describe this differently? Can you give me a bit more information about that? You’re hitting the ground running in terms of that conversation, you can go back to yours. If you haven’t done an R and D claim for a client, you can go back two years and, uh, and then that can give the client really good cash boost,
uh, typical values that were there. We’re looking at 40,000 pound a year for, uh, for, for a company. If it’s companies making repeat claims, you look at more at an average of about 70,000 pound a year of, uh, of value coming back into the company. Um, if the company is profit making, then they’ll save that tax.
Um, if it’s, if it’s not a profit Meghan company, then the revenue will actually pay, uh, an, an amount across to the company. They’ll write them a check, do bank transfer, and then you’ve got, it’s not, not quite the equivalent value, but, um, but you do get an awful lot of, of, of,
of the value that you would have had if you’re a profit making business. And so, and so, yeah, if you’re talking to, to businesses about R and D claims, um, and create starting points at the moment is to say, you know, how’s your business responding to all the disruption of the Corona virus? Have you had to change your products,
your processes, uh, it’s, it’s, you know, it shows that you’re interested in what the client is going through at the moment. And, uh, and also there are a lot of people out there having to, having to be innovative in the way that they do things having to respond to while we can’t get access to this material anymore. So we’re having to look at different materials that we can use,
and we’re doing things in different ways. So we need to make this safer, we need to do that differently. So it’s a great starting point for that conversation. Um, yeah. So a quick sort of run it through some lessons from the front line of R and D. I’ve been doing R and D for 20 years now, and I’ve been sort of,
you know, um, uh, doing an awful lot of it, um, over the last five years. Um, there’ve been very, very few inquiries into R and D claims. And I think, uh, you know, universally people say that that they’ve had very little experience of dealing with, uh, revenue inquiries because of their, the position I’ve got.
Um, do you end up handling quite quite a lot of revenue inquiries from accountants that have made a claim themselves, and then they’ve got sort of a juicy inquiry, so they pass it across state to be dealt with. So I’ve got some really strong experiences. And so there’s been a big change. Uh, inquiries are no longer sort of asking about the innovation in general.
You know, you genuinely doing something innovative. The inquiries are very, very much more detailed and it’s from inspectors that actually know what they’re talking about. Um, particularly in the software, uh, environment, the revenues. Now I’ve got some, uh, software experts and they’ve told the tax rules to rather than, as it was couple years ago, tax,
uh, tax inspectors that they’ve, um, tried to shoe on into looking at a software claims. And the revenue is aware that people have been pulling the wool over their eyes in terms of what’s innovative and what’s not in the world of digital and software for years. And so they’re cracking down pretty hard on that at the moment. Um, and, uh,
and the app. So the revenue target then specific sectors are getting looked at, uh, digital is, is an area that that’s going to look to our lot, uh, engineering and manufacturing as well. We’re seeing much, much more detailed, um, inquiries. They’re lots of, much into the innovation around the, uh, the client’s understanding of the rules and also into the,
the records that are being kept. Um, I’ve put on there, the death of percentage fees. Now, this is, this is something that’s, um, I can kind of separately bang on about for hours, but, um, but we’ve seen it across every other, um, every other aspect of professional services where there’s a, whether it’s a perceived risk that clients,
uh, uh, taking on too much risk, because they’re overly influenced by the percentage fees that advisors are charging, then, uh, then the regulation steps in and kills off the ability to, to charge a percentage fee or cap said we’ve seen percentage fees and R and D claims anywhere from 5%. Uh, they’re sort of very low end up to sort of,
well, 20% fairly standard, 25 30 in some cases, 35% and a half on occasion seeing, uh, seeing people charging 50% of the client’s tax refund as a, as a fee. Um, and that is that it’s just staggering. And there’s been a shift, um, in the, in the revenue and the treasury and the, with the political environment around this is now very definitely saying that,
uh, that there’s tax relief that’s meant to sustain the economy and help the economy grow. They don’t really want to be seeing on fires. There’s creaming off 30% of, of that, uh, for what should be relatively easy bit of work. Um, the there’s been an acknowledgement that actually the R and D uh, rules are poorly designed, but,
um, but the, the revenue have to work with what’s there at the moment. Um, and, uh, and really this sort of perception of percentage fees are skewing. The market is something that I think we’ll, we’ll see, um, regulators step in and start to, uh, apply some restrictions around that before too long. Um, you fix fees,
uh, really the way that, uh, that I think we should be going on R and D claims, particularly if it’s someone that’s into sort of a repeat claim scenario, if they’ve been making claims for three or four years, it’s very difficult to, to, uh, to justify to a client that, uh, that there needs to be this percentage fee to balance risk and reward.
You know, if they know that their claims going to go through, cause they’ve seen it go through three or four times before, um, then there’s this concept of a success risk-based fee is really sort of out of kilter with client expectations these days. So I thing, um, fixed fees is where we’re at, uh, on, on that going forward,
the revenue, um, always now ask about the client’s understanding of the best guidelines they wanted to speak to clients. And then they want to, to ask the client, you know, what do you understand of the base guidelines, even though they’re not actually called the biz guidelines anymore, the revenue always uses that terminology, excuse me. And if the client says like,
never heard of them, then, then you’re in bother. So, uh, so it’s a, it’s one of these things that, you know, we do try and make sure that the clients have got plenty access to, to help and guidance around that. And then there’s certain advisors that are, that are in the spotlight, um, ones that are known to base their claims on benchmarks and sort of Megan claims 10 or 10 or 15% up or down on,
on the, the benchmarks that they’ve got of revenue or aware of, of people doing that now. And, uh, and so they wanted to see, no, we’re not interested in, in assumptions of benchmarks. We want to see proper records, you know, who did, who did what work or what timeframe linking it in with the start and end date of project.
And they’re not expecting time sheets as such, but, uh, but the software that they developed does allow individual staff members to tank their time against these projects. And that is something that the revenue are now saying, given the, given that the technology is there available and easy to use, um, someone who comes along and says, well, I’ve just taken 20% of his time,
50% of hers, 35% of that person. They’re saying, look, that’s, that’s not good enough. And to be fair, it never has been good enough to, to make, um, bold assumptions like that. Um, and then also, yeah, the revenue are aware of people that, uh, that try and blind them with science, you know,
producing very thick reports, generally written by retired academics or, uh, or retired engineers. And these reports are lovely long flowing things, but don’t actually, um, don’t, don’t actually link in with the numbers. The revenue are aware of that. We’re conscious that they’re, that they want to see where the link is between the figures that go into the claim and the narrative.
And, and again, that’s something that the software really helps with. So I just want to give you a couple of really quick examples here. I’m sure everyone’s kind of aware of the benefits of R and D claims, but just to quickly illustrate this, a typical example might be someone who’s got 25 staff average salary, 25,000 pound a year said 10% of their staff time to spend on proof of concept work.
People seem to have to demonstrate their ability to solve problems to win work these days. And so if you’ve spent a hundred thousand pounds on materials on that kind of work over the year, then putting your salaries and materials together, 160,000 of qualifying costs, that’s going to give you an extra corporation tax deduction of 211,000 fair. So that translates into a 40,000 pound tax saving 160,000 pounds spent 40,000 pounds of tax saved.
So that’s an absolutely bulk standard examples that I think everyone will be familiar with. Um, what I want to do in this example is just to illustrate a slightly different angle on it. So let’s assume same scenario, but actually the company has been paid by a large company. So that’s one, that’s got more than 500 large turnover, a large balance sheet.
Um, and so that this large company has paid, um, Phil’s fabrication company to carry out some, uh, some, some work on, uh, on an RMD project for a large company. So again, I’ve kept the figures, the same hundred thousand pounds of materials, 10% of all the stuff time, uh, that’s on there. And,
and although I said, don’t use blanket assumptions, I’m using one for purposes of the example, um, in, in coming up with that 10%. Um, but yeah, putting your salaries and materials together, it’s the same quantifying cost as in the last example, but th the SME company can claim, uh, as if it was a large company.
So it’s going to claim the ARDEC tax credit rather than the, the, the, um, R and D tax relief, uh, enhanced expenditure. So that’s the above the line, um, credit, which would be 21,000 pounds in this case, that’s a taxable benefit though, taxable credit. So the net benefit is going to be 17,000 pounds. So this is,
this is one of the, a lot of people mess, which is why I wanted to highlight it. If the company has been paid to carry out that work, but it’s been paid by large company. And so long as the work was part of the large companies, R D project, your launch company can’t claim anything that it’s subcontracts out to SMEs,
but the SME can make this claim, even though it’s been paid, you can get another 17,000 pounds of benefit there by putting through a claim as though it was a large company for this. And, um, yeah, so, so that’s, that’s one that hopefully people will find useful. Um, Uh, both of them, both of them were,
were used. Um, well, I’ve taken lots of notes. Anyway, Simon, I found both parts of your session, extremely beneficial. And in terms of your subtle folk, where do, where do people contact you, or where do people find you? And if today has been of significant interest from our has rang a bell, Um, so they,
yeah, best place to get me for the, for anything to do with, um, your suspensions, um, SAS, hyphen law.com, um, and my email address, Simon dot Britt nuts. I saved from law.com. Um, that’s the, that’s the, the best way of getting ahold of me there. I work with, um, uh,
SAS, administrators, SAS trustees. What I do is the implementation. They set the SAS up. Um, I handled the implementation and the work with advisors around making sure that they’re, that the planning is, is right, and then that the implementation is right. Um, so, so if I ever wants to kick ideas around about how could we use a sauce for this client,
um, than, than yet, give me a shout. We’re very happy to, to work through examples that, and, uh, and, and develop some planet on the R and D side of things, quantified.tax is, uh, that’s, that’s where you’ll find details of the, uh, the software platform, um, that, uh, that,
that helps clients put together, um, the, the R and D clam. And, uh, and also, yeah, you can contact me. They’re more than happy day to get involved with, um, any sort of technical queries people have got around R and D. Um, and to, uh, to, uh, we, we’ve got sort of a tailored service.
If it’s a client that’s comfortable with R and D and, and wants to, uh, to manage their, their fees a bit better, um, that they can use the software themselves. Um, we, can we go from there all the way up to sort of, you know, reviewing their claims for them or giving them complete handholding consultation service for someone that’s never done a claim before.
Um, but it’s, um, but yeah, so I, either of those would be a good place to, to catch me. Um, and, um, yeah, thanks. Thanks very much for, uh, joining us Well, Simon, thank you very much. And thank you. All of those who have joined us across the various platforms where you’re plugging in.
And obviously if you found some of your benefit and what Simon has covered today, you have Steiner’s contact details there, and we’re going to continue running these webinars stroke COVID-19 and we have a full schedule of free webinars for UK accountants. So please, if you found this of benefit, pass it onto your friends, pass on the lakes link, the next email that you get,
and we’ve got to shed you where we’re developing a schedule. We’ve got some excellent speakers coming up in the month of may and beyond. So on behalf of Omnipro and our entire team, and on behalf of myself and Simon, thank you very much. Let’s stick together. I meant to get a donut.