Champion Round-Up | By Ged Cosgrove, group managing partner
With spring in full bloom, the new season has brought a raft of changes for our clients to consider.
Changes to the R&D tax relief scheme came into play recently, reducing cost savings for SMEs. For R&D expenditure, the additional tax deduction for SMEs will reduce from 130% to 86%, and the SME tax credit rate – the amount that you can surrender your eligible R&D losses for a cash repayment – will reduce from 14.5% to 10%.
In contrast, the research and development expenditure credit (RDEC) – the scheme available to large businesses and SMEs in certain circumstances – will increase from 13% to 20%. For companies within the RDEC scheme, a net credit of 15% is currently available.
It’s worth spending some time understanding these changes and how they could impact your business. Alongside these, there are an increasing number of submissions facing compliance checks by HMRC to judge the legitimacy and accuracy of tax credit claims. From our experience so far, it looks to be a long-winded enquiry process, so if you have any concerns, our Champion advisors are here to help.
Changes to Corporation Tax are also now active, meaning that companies with profits of £250,000 and above will see their rate jump from 19% to 25%. Companies with profits of £50,000 and below will continue to be charged at the historic 19% rate, and those who fall in between will be subject to 25%, with a Marginal Small Companies Relief (MSCR) deduction. It’s important to be aware of and prepared for a higher rate of tax.
A new Energy Bill Discount Scheme (EBDS) also came into effect on 1st April, which replaces the Energy Bill Relief Scheme (EBRS). The scheme supports those energy intensive businesses, voluntary sector and public sector organisations but many companies operate energy costs below the current levels of scope, meaning they are no longer eligible for support.
Change is also underway here at Champion, and we are delighted to have recruited a full cohort of trainees who will join our offices this summer. Our past trainees have achieved wonderful things in their careers, many staying with us at Champion and now holding senior positions.
We are delighted, in fact, to celebrate the qualification of one extremely valued team member and former trainee. Jack Cain, in our Manchester office, has passed his final exam and is now ACCA qualified. A fantastic achievement from a dedicated hard worker, who has embraced life at Champion and all the opportunities he’s had here so far.
Jack’s first experience of the business was during a work experience placement, where he spent two weeks getting a feel for life at Champion. In 2016, on completion of his A Levels, he took up a trainee role, studying alongside a growing list of responsibilities.
Jack says: “The environment here at Champion has played a massive part in me reaching qualification. This is a really supportive place and I’ve had help along the way whenever I’ve needed it, learning from everyone around me. And while support with my professional development has been fantastic, it also helps that this is a nice place to work, full of friendly people. Now that I’m qualified, I’m looking forward to taking on more responsibility and benefitting from a host of new opportunities.
“I’d like to wish our new recruits good luck in their traineeships. There is a place for everyone here if they accept the help on offer, concentrate on their work, and soak up as much experience as they can.”
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