Welcome to our round-up of the latest business news for our clients. Please contact us if you want to talk about how these updates affect your business. We are here to support you!
HMRC Guidance On Goodwill Valuations
The valuation of business goodwill for tax purposes is very subjective and is often a contentious area. HMRC have recently updated their guidance in their Shares and Assets Valuation Manual.
The guidance makes a distinction between goodwill for Capital Gains purposes and goodwill within the corporate intangibles regime where accountancy principles apply. The accounting rules define goodwill as the difference between the overall worth of a business when it changes hands and the value of its identifiable (including intangible) assets.
The HMRC guidance goes on to state that the goodwill of a business is the “attractive force” which brings in custom, it is the thing that distinguishes an old established business from a new entity. In a business reliant on the skill, personality and other personal attributes of the proprietor, it is likely that the goodwill will be personal to the proprietor.
The guidance also sets out the information required by HMRC Shares and Assets Valuation when asked to agree on a goodwill valuation with the taxpayer.
Note that the disposal of goodwill and customer-related assets by individuals no longer qualifies for CGT Business Asset Disposal relief (previously entrepreneurs’ relief) but the disposal would be subject to CGT at normal rates. Corporate intangibles relief for the acquisition of goodwill was abolished for acquisitions from 7 July 2017, although a restricted form of relief was introduced in the Finance Act 2019.
We can assist you in valuing the goodwill of your business and calculating the value of your business in general whether for tax purposes or when you are considering a sale.
Thinking Of Selling Your Business?
The ultimate aim of every serious business person is to build a company that has value, so that it can be sold or transferred, allowing the entrepreneur to exit gracefully and profitably.
Recently, we have been helping a number of our entrepreneur clients develop exit strategies. There are many issues to consider:
- When do you want to retire?
- Can the business be sold to your employees?
- Is a trade sale more likely?
- Are there children involved?
- How much is the business worth?
- What needs to be done to enhance the value of the business?
- How long will it take?
- Do you want/need to stay on after the sale or transfer?
- What are the tax consequences?
We have a tried and tested methodology to address these issues and to help you prepare your business for sale, find potential buyers and help you negotiate to get the maximum price. If you would like to discuss your personal exit plans, we would be happy to do so with you — please call us!
HMRC Make Arrests In Connection With Suspected Fraudulent R&D Claims
In the light of a recent article in The Times last week, the HMRC Press Office issued the following tweet:
“By acting quickly to pause payments and implement additional checks on claims we have protected £46 million of public money. We have also arrested 8 people suspected of conspiring to submit over 100 fraudulent R&D claims”
The current rules allow small and medium-sized companies undertaking qualifying research and development expenditure to claim a tax refund equivalent to 33.35% of the expenditure. This is because the relief is currently 230% of the amount spent and any resulting loss can be surrendered for a 14.5% refund from HMRC. This generous tax break has led to a number of alleged “rogue” R&D consultants making spurious claims on behalf of companies.
What Projects Qualify For R&D Tax Relief?
HMRC have also recently updated and reissued their guidelines on the conditions to be satisfied for a valid R&D claim:
The accountancy definition of R&D is modified for tax purposes by the Guidelines, which are given legal force by Parliamentary Regulations.
Note in particular that R&D for tax purposes takes place when a project seeks to achieve an advance in science or technology. The activities which directly contribute to achieving this advance in science or technology through the resolution of scientific or technological uncertainty are R&D.
Certain qualifying indirect activities related to the project are also R&D. Activities other than qualifying indirect activities which do not directly contribute to the resolution of scientific or technological uncertainty in an overall project are not R&D.
An advance in science or technology means an advance in overall knowledge or capability in a field of science or technology (not a company’s own state of knowledge alone). This includes the adaptation of knowledge or capability from another field of science or technology in order to make such an advance where this adaptation was not readily deducible by a competent professional in that field.
A process, material, device, product, service or source of knowledge does not become an advance in science or technology simply because science or technology is used in its creation. Work which uses science or technology, but which does not advance scientific or technological capability as a whole is not an advance in science or technology.
If you think that some of the technological developments that are being carried out within your company might qualify as R&D please contact us so that we can consider whether or not you might be eligible to make a valid claim for this generous tax relief.
Self-Assessment: Declare Your COVID-19 Payments
HMRC is reminding their Self-Assessment taxpayers that they must declare COVID-19 payments in their tax return for the 2021 to 2022 tax year.
More than 2.9 million people claimed at least one Self-Employment Income Support Scheme (SEISS) payment up to 5 April 2022. These grants are taxable and should be declared on tax returns for the 2021 to 2022 tax year before the deadline on 31 January 2023.
SEISS Payments
The SEISS application and payment windows during the 2021 to 2022 tax year were:
- SEISS Four: 22 April 2021 to 1 June 2021
- SEISS Five: 29 July 2021 to 30 September 2021
Other Payments
SEISS is not the only COVID-19 support scheme that should be declared on tax returns. If you received other support payments during the 2021 to 2022 tax year, you may need to report this on your tax return if you are:
- Self-employed
- In a partnership
- A business
See: Reporting coronavirus (COVID-19) grants and support payments – GOV.UK (www.gov.uk)
Company Tax Returns – Job Retention Scheme And Eat Out To Help Out
If you received a Coronavirus Job Retention Scheme (CJRS) grant or an Eat Out to Help Out payment, you will need to do both of the following:
- Include it as income when calculating your taxable profits in line with the relevant accounting standards.
- Report it separately on your Company Tax Return using the Coronavirus Job Retention Scheme and Eat Out to Help Out boxes.
You should record all other taxable COVID-19 payments as income when you calculate your taxable profits.
Please talk to us if you require our help in disclosing grants and other support to HMRC.
See: Corporation Tax forms – GOV.UK (www.gov.uk)
Business Finance Week 2022 – This Week!
Throughout this week, the British Business Bank, along with business support partners from across the UK, are working together to host the inaugural Business Finance Week 2022.
During the five days of nationwide and regional in-person events, webinars and more, they hope to help smaller businesses learn all about the different finance options available to them to support their individual needs.
Each day will be centred around a key theme, giving SMEs the opportunity to hear from experts in their field on a varied range of subjects.
The themes are:
- Funding your start-up – 7 November 2022
- Angel investment – 8 November 2022
- Equity for growth – 9 November 2022
- Debt for business – 10 November 2022
- Green finance – 11 November 2022
See: Business Finance Week 2022 – British Business Bank (british-business-bank.co.uk)
Sustainable Food Investment Readiness Programme 2022
Innovate UK Knowledge Transfer Network (KTN) is looking for innovative UK SMEs who wish to seek private investment to fast-track sustainable food innovation and who would benefit from investment pitch training, mentorship and an opportunity to present to investors at an Investment Showcase Event.
The scope of the Sustainable Food Investment Readiness Programme includes:
- Agri tech
- Sustainable protein
- Controlled environment agriculture
- Low emission food production systems
The aim of the programme is to prepare SMEs to successfully and succinctly communicate their investment opportunity to investors and improve their chances of securing private funding for their innovation.
Successful applicants will receive online and in-person investment pitch training and mentorship, and an opportunity to present their final pitch to an internal Innovate UK and Innovate UK KTN selection panel.
Up to 14 participants from the training cohort will then be selected to present their investment pitch to a pool of private sector-relevant investors in the Sustainable Food Investment Showcase Event in February 2023.
All training will take place at the Innovate UK KTN London office unless otherwise stated.
The Small Business Saturday UK Tour Will Hit The Road Again This November!
Calling at 23 different towns and cities across the UK, the special ten-year anniversary tour will mark the official countdown to Small Business Saturday on 3 December 2022.
‘The Tour’ kicked off in Glasgow on Monday 31 October 2022 and will travel across the UK for five weeks, spotlighting Britain’s amazing small businesses.
And to be as sustainable as possible, given the vital role small firms play in the race to net zero, the tour will be using a fleet of electric and zero-emissions vehicles.
Once again, ‘The Tour’ will offer:
- Livestreamed interviews with business owners and local leaders on their Instagram channel (@smallbizsatuk).
- Free 1-1 mentoring sessions.
- A range of business experts available to offer individual help and advice.
See: Small Business Saturday UK | Another year making a Big Difference!
Trustees’ Week 2022
Trustees are the people in charge of a charity. They play a vital role, volunteering their time and working together to make important decisions about the charity’s work. Trustees’ Week is an annual event to showcase the great work that trustees do and highlight opportunities for people from all walks of life to get involved and make a difference.
This year Trustees week takes place from 7 November to 11 November 2022.
Events all around the country will celebrate the achievements of trustees, as well as highlight opportunities for you to get involved with a local charity or voluntary organisation at the board level.
See: Trustees Week – Showcasing the work of charity trustees
Latest Recommended Christmas Posting Dates
Royal Mail has released the latest posting dates for Christmas. They say to allow plenty of time for posting and post items and gifts for Christmas early, particularly for international deliveries:
- Friday 16 December 2022 – Royal Mail Bulk Mail Economy
- Monday 19 December 2022 – 2nd Class, 2nd Class Signed For, Royal Mail 48®
- Wednesday 21 December 2022 – 1st Class, 1st Class Signed For, Royal Mail 24®, Royal Mail Tracked 48®**
- Thursday 22 December 2022 – Special Delivery Guaranteed® Royal Mail Tracked 24®**
- Friday 23 December 2022 – Special Delivery Guaranteed® with Saturday Guarantee
Royal Mail Tracked 24® and Royal Mail Tracked 48® are not available to purchase at Post Office® branches.
See: Get ready for Christmas 2022 | Royal Mail Group Ltd
Net Zero Living: Pioneer Places
UK registered businesses and local authorities can apply for a share of up to £2 million to develop detailed local plans for innovative approaches to unlock non-technical systemic barriers to the delivery of net zero targets.
The aim of this competition is to support up to 30 places to develop a plan, with local authorities, to accelerate their transition to net zero.
You must consider the whole net zero system in your area, including:
- Power
- Heat
- Mobility
- Product manufacture and usage
This competition is open to collaborations only and closes on 30 November 2022.
Innovate Uk Smart Grants: October 2022
Innovate UK, part of UK Research and Innovation, has launched another round of Smart Grants funding for game-changing and commercially viable R&D innovation
Up to £25 million is available for disruptive research and development (R&D) innovations that can significantly impact the UK economy. All proposals must be business-focused, with deliverable, realistic, adequately resourced plans to achieve a return on investment, growth, and market share following project completion. Applications can come from any area of technology and be applied to any part of the economy, such as:
- Net zero
- The arts
- Design and media
To be in scope, your proposal must demonstrate (amongst other things):
- A game-changing, innovative, and disruptive idea that will lead to new products, processes or services.
- An idea that is significantly ahead of others in the field, set for rapid commercialisation.
- Clear potential to positively impact the UK’s position, productivity and competitiveness within the global economy.
Projects can be across a variety of technologies, markets and research categories, including:
- Feasibility projects
- Industrial research projects
- Experimental development projects
Your application must include at least one micro, small or medium-sized enterprise (SME) as the lead or a collaborative grant-claiming partner.
Projects must start by 1 July 2023 and end by 30 June 2026 and follow specific rules dependent on their duration.
Take Heights Seriously Safety Campaign
The Health and Safety Executive for Northern Ireland (HSENI) has launched a campaign reminding the construction industry about the importance of using suitable access equipment, working platforms and edge protection when working at height.
Sadly since 2020, falls have killed nine workers carrying out construction work at height in Northern Ireland.
It is essential, for those in control of work at height, to make sure work is properly planned, supervised and carried out by competent people with the skills, knowledge and experience to do the job. If in doubt, seek advice from a health and safety professional as to how to carry the work out safely.
The campaign includes guidance on:
- Prevention, preparation and actions to take.
- The dos and don’ts of working at height.
- Workplace and management resources.
See: Working at height | Health and Safety Executive Northern Ireland (hseni.gov.uk)
Safety Of Older Tyres On Heavy Vehicles Consultation
The Department for Infrastructure (DfI) is seeking your views about the proposal to introduce legislation in Northern Ireland which bans the use of tyres 10 years or older on certain vehicle types.
From 1 February 2021, legislation is in place in Great Britain (England, Scotland and Wales) which places a ban on 10-year-old tyres in GB. The ban applies to the front axles of heavy goods vehicles (HGVs), buses and coaches, and all axles on minibuses when fitted in single configuration. This ban applies not only to vehicles registered in GB but also to those that are visiting GB, which includes those from NI. Currently, the Republic of Ireland has no policy on this issue.
The proposed ban in NI would apply to the front axles of heavy goods vehicles, buses and coaches and on all axles of minibuses when fitted in single configuration but does not include private cars.
This consultation will be of interest if you, or your organisation, own or operate any of the vehicle types listed above or are involved in the maintenance of these vehicle types, or the manufacture, provision and/or maintenance of tyres for these vehicle types.
InterTradeIreland Funding Advisory Workshops
InterTradeIreland is holding an autumn series of online funding advisory workshops. The first was on the 26 October on sustainability and the next two are:
Tuesday 22 November 2022 – Macro Financing And Economic Trends
The webinar will start with a presentation from Grant Thornton’s chief economist about recent economic trends.
Attendees will then hear from a panel of Irish investment institutions discussing the current market including opportunities and challenges for SMEs.
Tuesday 13 December 2022 – Funding For Smaller Scale Smes
This workshop will start with a presentation on tax-related matters for growing SMEs.
Attendees will also hear from a panel of experienced SME funders on the current funding landscape and opportunities for SMEs.
See: Funding Advisory Service Workshops Ireland – The Autumn Trilogy | InterTradeIreland
Fodc Enterprise Week 2022
As part of the wider Global Entrepreneurship Week 2022, Fermanagh and Omagh District Council (FODC) has announced a week of free online and in-person events.
Taking place from Monday 14 November to Friday 18 November 2022, these events are designed to inspire and help you explore the skills, knowledge and attributes needed to grow or start up your business.
Events include:
- Develop & Deliver a Compelling Sales Pitch
- Getting your website found on Google
- Sourcing Public Sector Opportunities
- Developing & Enhancing Visitor Experiences
- Develop an Entrepreneurial Mindset with Phil Graham
- Social Media Marketing – TikTok and YouTube
- Go for it! Coffee Morning Enniskillen and Omagh
- Growth through Innovation
- Employment Matters
- Selling to Customers Outside NI
See: FODC Enterprise Week 2022 – Fermanagh & Omagh District Council (fermanaghomagh.com)
Energy One Stop Shop Consultation
The Department for the Economy has launched a public consultation on the development of an Energy “One-Stop Shop” (OSS). The One Stop Shop will work with partners to consolidate advice, guidance and support in energy-related matters in an effort to simplify the energy decarbonisation journey for consumers, whether they need impartial advice on what to do and how to do it, or protection along the decarbonisation journey.
This will be an important pillar on the journey to energy decarbonisation and will provide a gateway for consumers seeking information, advice and guidance on energy-related matters.
The Consultation opened on 27 October 2022. Closing date 20 January 2023 at 17:00.
North West Innovation Workshops
Invest Northern Ireland is hosting two free Growth Through Innovation workshops at their North West Office in Derry Londonderry this November. Both workshops will be delivered by Innovate UK EDGE Northern Ireland.
Workshop 1 – Problem Prioritisation And Ideation
The first workshop will focus on problem prioritisation and ideation. By participating, you will gain tools and techniques to help you:
- Identify problems you want to solve to generate more ideas and find optimal solutions both for your business and your customers.
- Narrow down your ideas to the most viable options that you can take forward to develop within your business.
You will also gain an understanding of the support available to help you move forward.
Workshop 2 – Growth Through Business Modelling
The second workshop will boost your entrepreneurial thinking and spark new ideas, allowing you to take decisive action that could help your business survive and grow. Through hands-on learning, real-world case studies and group work, this workshop will enable you to test practical tools that will support you and your business to develop and refine a value proposition to support growth.
It will show you how to use the highly acclaimed business strategy tool – Business Model Canvas – to help develop and launch new products and services or reinvigorate your existing business strategy. The canvas provides a shared language, leading to better strategic conversations and better ideas on the table.
See: Register for Growth North West innovation workshops (nibusinessinfo.co.uk)
Recruitment And Retention In Tourism And Hospitality
This Tourism NI event aims to help local tourism and hospitality businesses address the challenges of recruiting, retaining and training staff.
One of the largest challenges facing the tourism and hospitality industry is the recruitment and retention of staff. The tourism and hospitality sector, along with others, has suffered setbacks and new challenges as a result of the COVID-19 pandemic and EU Exit.
Staff training is also imperative for retention and career progression in order to stabilise and grow the sector. Due to increased operating costs, it is more important than ever that the sector is able to adapt and maximise savings from its ability to recruit, retain and train its workforce.
Tourism Northern Ireland is hosting an event to help local tourism and hospitality businesses address these key employment challenges.
Industry Insights
At this insights session you will:
- Learn about the latest in-depth local research conducted by Tourism NI carried out with a range of their stakeholders.
- Assess your current recruitment and retention practices.
- Review your training and development plans.
- Adapt and improve your people practices based on expertise and advice from those who can demonstrate and share results.
Employer Best Practice
Key themes of the day will centre around examining good practice in the areas of:
- Reward and employee engagement
- Progression opportunities
- Flexibility and work-life balance
- Exploring recruiting from non-traditional channels and how to reach wider labour pools
- Becoming an employer of choice
Date: Wednesday 9 November 2022
Time: 10am to 2pm
Location: Clandeboye Lodge Hotel, Bangor
Cost: Free
See: Event focuses on recruitment and retention in tourism and hospitality (nibusinessinfo.co.uk)
