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Tax planning for SMEs Corporation Tax: R&D relief and Patent Box June 2013 John Foskett Associate Director firstname.lastname@example.org. Overview. Research & Development Tax Relief What is Research & Development Relief? Q ualifying criteria The b enefits Obtaining the benefits
Research & Development Tax Relief
The Patent Box Regime
An SME company meets the following tests:
The Coalition Government
…. with full benefit from 1 April 2017
R&D tax credits
Tax planning for SMEsEmployment Tax: Current issues and opportunitiesJune 2013Sharon GilkesAssociate Directorsharon.email@example.com
- Right to control - When, Where, How and What
- Financial Risk – operating as a true business
- Invoice/Payment terms - fixed price, expenses included
- Right of substitution - unqualified right/practical implications
- Part and Parcel of the organisation - desk, Christmas party!
- Work for other clients
Covered by dispensation
Not covered by dispensation
Cash/credit card/pecuniary liability
Employer meets expense
P11D Class A
PAYE/P11D Class 1 NIC
No Class 1A Tax Relief via self assessment
- Redundancy - do the facts support redundancy
- Contractual payments - holiday, bonus
- Payments in lieu of Notice - contractual/non-contractual
- Critical Assessment of the termination and the payment(s)
- Mitigation of payments taken into account
Who will be affected?
order to generate employment cost savings
Example of employee earning £30,000 pa financing a BMW 118d from net pay, list price £19,800. This has
an annual cost to the employee of £5,398 but which could be obtained by the Company for £5,000 pa.
Employee income increases by £1,286 and Employer NIC reduces by £199 (taking into account NIC due
on car benefit).
Total combined savings exceed £1,485 per annum, which can be shared between the Employer and
Rates used 2012/13
Example of employee earing £25,000 pa who would be entitled to £1,175 in tax free subsistence
allowance payments per annum based on 235 work days. Subsistence costs are currently being met by the
employee from net pay after payroll deductions. Savings are shared as they arise
Employee net income increases by £376 per annum – equivalent to a 2.2% gross pay increase.
Employer NIC /costs reduce by £162 per annum.
Total combined savings £538 per annum.
Other benefits which could be included which would provide employees with further flexible arrangements as well as generating savings for the employer as well as employees include:
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