FINANCE


Make pension investments in property


A leading firm of chartered accountants is encouraging local business owners to explore the potential benefits of investing in commercial property through their pension schemes. Newby Castleman, which has


offices in Leicester and Loughborough, says that business owners who use their personal


pension schemes to buy their work premises can take advantage of tax breaks and exemptions. Many business owners are now


placing their business premises into tax-free pension schemes. The business then rents the property from the pension scheme. As payments into the pension scheme are tax-free, the company saves money on tax and the business owner can quickly build up a considerable pension pot. Using these pension schemes to


John Griffin


UK SMEs could earn more interest


New research from Cambridge & Counties Bank reveals that around a third (30%) of business deposit accounts are paying 0.1% Gross/AER or less on balances of £25,000, highlighting the real opportunity for UK businesses to shop around. The fast-growing niche bank


reveals that in the current low yield environment there are now only 17 providers offering businesses an interest rate of more than one per cent Gross/AER or more on balances of £25,000, a figure which has fallen by around two thirds (64%) from the number available back in December 2015. Mike Kirsopp, Chief Executive


Officer at Cambridge & Counties Bank, said: “Businesses have a great opportunity to shop around to get a better return on their deposits. It’s all too easy to stick with the same old bank but we’d urge SMEs to take advantage of the higher rates that are available on the market”. Following the August rate cut by


the Bank of England, the average rate available for accounts with a balance of £25,000 has continued to decline to 0.41% Gross/AER. This is 38% down from the start of the year and means that UK SMEs are missing out on an estimated £473m of interest.


52 business network February 2017


purchase commercial property entitles the buyer to a corporation tax relief of 20% on pension contributions, so those who rent their current workplace from a third party but would like to buy some office space may be better to do so via their pension fund. Many personal pension schemes will also allow the business owner to


Nudge up tax credit claims


Sam Stephens of TBAT Innovation asks whether the use of ‘Nudge Theory’ could increase R&D Tax Credit claims.


Why don’t we make choices that are good for us or our businesses? Could it be that we are ignorant of those choices or just plain stuck in our ways? After seeing the latest figures from HMRC which show


that while claims to research and development (R&D) tax credits are increasing, this is at a lower rate than in previous years, how might more company directors be persuaded to apply and do they need a ‘nudge’? The work of the Government’s Behavioural Insights


Team (BIT), dubbed the ‘Nudge Unit’, is fascinating. Set up in 2010 to help improve Government efficiency, this team of thinkers apply behavioural science to find out why people don’t make the decisions that would be best for them. Nudge Theory would have us believe that if you


present choices in a different way, it is possible to change behaviours. Experiments by the unit have included the use of plainer English in letters to non-payers of vehicle


tax – “pay your tax or lose your car” – which doubled the number of people who paid. So what could behavioural science tell us about the


company that can apply for R&D tax relief but doesn’t? Helpfully, the BIT has devised a simple framework, EAST (Easy, Attractive, Social and Timely) to check whether a policy is effective and efficient. Assuming we all want to encourage more clients to


claim back what is due to them, what ‘nudges’ based on the EAST framework would give the biggest shove in behavioural outcomes? Too many companies are still unaware of the tax credit


and if they do know about it they don’t understand what qualifies as research and development. Completing the forms can be a time-consuming exercise, and the lack of any specific deadlines – other than within the two year qualifying period - is ironically counter-productive.


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