In a recent HMRC test case (Ames v CRC), the Upper Tribunal considered whether it was necessary for EIS income tax relief to have been claimed when an EIS investment was made, for the transaction to then potentially qualify for exemption from capital gains tax when the investment was sold. For the case in question,…
Tech companies that are financed through EIS equity cash will be aware that this ‘tax wrapper’ can be super-generous, but that many criteria have to be met to ensure eligibility. One of these long standing criteria has been that the company must use the proceeds (up to £5m pa) raised: In either a qualifying trade…
R&D tax relief, to provide government subsidies to those companies that develop innovation products, services or systems, has been with us for 17 years now. The latest HMRC R&D tax relief take-up report, encouragingly, shows that the following recent improvements to the scheme have increased the amount of tax relief claimed by 22% over the…
In a bid to give companies more certainty over whether or not their R&D claim will be successful, HMRC introduced an advance assurance process in November 2015. If you pass this new test, HMRC will agree not to enquire into your R&D claims for the first 3 accounting periods of claiming this relief. So is…
EIS: Growth Shares and Preference. Abingdon Health Ltd v HMRC TC05525 This was an interesting case, and a warning for the unwary. The issue at stake was whether HMRC’s withdrawal of EIS relief as a result of a preference created by a new class of growth share was reasonable. The taxpayer company sought EIS relief in respect…
MBO: Self-funding £1m deal allows owners to retire. We have successfully advised the business owners of an engineering firm on its £1m buy out by the existing management team. Our team were initially approached by the business owners for exit planning advice. The owners had successfully built up an engineering business over 20 years and…
R&D Tax Relief: Claims rose by 38% in 2014-15. The latest data from HMRC indicates that there has been an increase in both the number of companies making R&D tax relief claims and also that companies are increasing their R&D spend. The fact that there are a significant number of companies making claims for the first time…
Super Tax Reliefs: Claim both patent box and R&D relief? The answer to this question is yes and the combination of the two reliefs can be very valuable! We have a number of clients who are undertaking ongoing research and have already registered a patent on their earlier research. They are able to receive the…
New Dividend Tax Rules: Planning opportunities during transition. In his 2015 Summer Budget George Osborne rewrote the rules for calculating the income tax that individuals and trusts pay on their dividend income: Abolished the tax credit, Introduced a £5k tax free dividend allowance, Increased all of the tax rates on dividend income by +7.5%. As these…
EMI Share Options: the tax advantages. Enterprise Management Incentives (EMI) are a tax advantaged share option scheme that can be used to provide an incentive to key staff. The key tax advantage of EMI options in most cases is that no income tax or national insurance will be payable on the exercise of the option. The…