Business groups such as the Federation of Small Businesses (FSB) have urged Chancellor Philip Hammond to emphasise that the “UK is open for business” in this year’s Autumn Statement, which is due on 22 November. Read More
Chancellor Philip Hammond has defended people who go into business to make a profit, saying that the free market economy liberates people and businesses whose taxes pay for the UK’s public services. Read More
Recent research has found that buy-to-let taxes are causing widespread confusion, with 74 per cent of landlords surveyed saying that landlord property taxes are not clear enough. Read More
According to recent research, just over three quarters of the UK’s engineering small and medium-sized enterprises (SMEs) have not heard of research and development (R&D) tax relief.
This is a huge loss, as the R&D tax credit scheme, administered by HM Revenue & Customs (HMRC), supports UK innovation by refunding up to 33.35 per cent of costs for any SMEs undertaking scheme eligible activities, thereby boosting cash flow and enabling investment in growth.
To date, more than £14 billion has been given back to UK businesses. However, the use of the incentive is surprisingly low, with fewer than two per cent of UK registered firms of any kind having claimed their entitlement in the 17 years since the scheme started.
Moreover, the research suggests that even when senior managers and owners at smaller engineering firms have heard of R&D tax relief, more than a third believe it is restricted to specialist, hi-tech science or drug companies. This is a shame, as the average annual claim is £55,000 for an SME, and more than £450,000 for a large company.
Engineering firms also believe that any eligible R&D activity must be successful for a claim to be made, even though this is not the case. In fact, the outcome of the R&D is irrelevant – what matters is that time and money has been spent developing the new technology, processes or techniques.
Sadly, the lack of awareness around R&D and the eligibility criteria that applies is costing the UK’s engineering firms millions in tax relief every year, particularly for smaller engineering businesses that may not have access to the tax resource and expertise of their larger peers.
Therefore, it is crucial that innovative firms seek advice about the tax relief, as a successful claim could net them tens of thousands of pounds.
Recent research has found that legal and accountancy businesses in the UK generated £15.5 billion for the Treasury in 2015/16, including £6.4 billion in taxes immediately borne by businesses and £9.1 billion in related taxes. Read More
Former Chancellor Lord Lawson has suggested that the UK could adopt a ‘Trump-style’ border tax to replace corporation tax, which would help to offset the impact of Brexit.
Speaking to Sky News this week, Lord Lawson praised the idea of a border tax, which President Trump maintains will pay for his famed wall with Mexico, and said that the UK should consider adopting something similar.
His comments came as Republicans are urging the President to adopt their proposals for what they term a ‘destination-based cash-flow tax’, which would amount to the most radical reform of business tax in almost a century.
The new taxation system would reverse the current system where businesses are taxed on the basis of where goods are produced and would instead tax them on where they are sold. There would also be a ‘border adjustment’ in which all imports would have to pay a ‘border tax’.
Interestingly, although the tax is likely to be implemented first in the US, the idea was dreamed up by a British academic at the turn of the millennium. Professor Michael Devereux suggested a tax that would help to cut down on tax avoidance by multinationals, which often move tax profits around the world towards low tax jurisdictions such as Luxembourg.
As Professor Devereux commented, if the tax rate on production was set at zero, manufacturers would be more likely to relocate here, which would be a huge boost to the UK economy, which could in turn help to offset the disadvantages of leaving the EU.
Lord Lawson, who abolished several taxes while he was Chancellor, agrees with this idea, saying that corporation tax is “past its sell-by date” and pointed out that there is no reason for the US to lead the way in the change when we could easily make it happen in the UK.
The Association for Licensed Multiple Retailers (AMLR) has written to Chancellor Philip Hammond asking him to dilute the impact of business rate rises due in April, claiming that many pubs and restaurants could go out of business because of the increases. Read More
Following criticism from MPs, who described the Government’s plans for Making Tax Digital (MTD) “overambitious”, HM Revenue & Customs (HMRC) has pledged that businesses will not be hit with penalties in the first 12 months. Read More
An increase in tax receipts last year helped Chancellor Philip Hammond to remain on track to meet a deficit reduction target this year, with the corporation tax take rising by 12.4 per cent to £4bn. Read More
In an interview last weekend with German newspaper Welt am Sonntag, Chancellor Philip Hammond suggested that the UK could become a corporate tax haven if Brussels fails to negotiate on the proposals set out by Prime Minister Theresa May this week. Read More