- The UK information/technology sector contributes £180bn to the UK economy each year and receives 24% of all UK Government R&D tax credits - T e UK construction sector contributes £117bn to the UK economy each year and receives less than 3% of all the UK government R&D tax credits.
This clearly shows that millions of pounds go unclaimed each year. To support businesses, the Treasury has increased the number of personnel handling such claims to help get cash back where it belongs – in the business’s bank accounts. T e good news is that R&D tax credit claims are
currently, on the whole, being turned around in one month. T e downside is that more claims are being carefully scrutinised by HMRC and more claims are being queried. Precision and detail are paramount in order to reach early agreement at the submitted fi gure. An expert eye from the outset will not only
identify all the potential claims but ensure that they are put forward in the right way at the right time to ensure success. For example, a client of mine purchased a mixed-use property in a business park in the Home Counties and asked me to review it for any unclaimed capital allowances. This one purchase resulted in six diff erent tax relief claims. It started well when it turned out the seller
hadn’t claimed any capital allowances, which was excellent news for my client who was able to make a claim on the purchase price paid. 25% of the purchase price qualifi ed for allowances.
T ey then refurbished the property and subdivided it into three
units; one for their business and two for new tenants. One tenant signed a lease on the basis that my client contributed towards the unit fi t out. What started out as a simple fi t out in the client’s mind turned
out to be a lot more complex. T ere are various categories that the expenditure falls into on this project: - General plant claim (18% pa) for expenditure on the demountable partitions, blinds, carpets, storage racking, ironmongery, security alarm, electric sliding doors, WC facilities, kitchen fi ttings and offi ce furniture -
Integral features (6% pa) claim for the electrical installations,
heating, comfort cooling, and hot and cold water services - Research and development allowances (100% fya) claim on the cost involved in constructing a research and test area in the workshop - Structures and buildings (3%) claim for the balance of the works - Land remediation – asbestos removal (150% fya)
In addition, my client was able to make a claim for their Capital Contribution (6% and 18%) to the tenant’s fi t out. All these allowances must be accounted for separately and are not given automatically. T e legislation and HMRC dictate which category the expenditure has to go in so that they can be claimed in the tax computations. Working closely with my client and his accountant, we were able to
ensure the claims were optimised and submitted as early as possible in order to receive the savings and get the cash back into the business to help with cash fl ow. If we are to Build Back Better, as the PM wants us to, we need to get
smarter at taking full advantage of these Government-backed schemes and get the cash back in to the banks of businesses to help with the economic recovery this country is hoping for.
For more information, contact Barth Consulting on 07775 021365 or visit
www.barthconsulting.co.uk or contact Louise via LinkedIn
www.linkedin.com/in/louise-barth
ALL THINGS BUSINESS 9
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