ImagesMagUK_Digital_Edition_Feb18

BUSINESS DEVELOPMENT www.images-magazine.com 20 images FEBRUARY 2018 ■ Retail sales in December 2017 increased by just 0.6% on the year before, reports the British Retail Consortium (BRC), with online sales rising by 7.6%. BRC’s chief executive, Helen Dickinson, said: “Retailers who did well in such a challenging environment got both their discounting strategy and omni-channel offerings right. Those who could offer and deliver on last minute delivery options did better, boosting online non-food sales more than 15% in the seven days before Christmas, a week when, until now, shoppers would have had to turn to stores to ensure gifts made it under the tree in time.” www.brc.org.uk ■ Hitachi Capital Invoice Finance has created a nifty PDF of the key dates in 2018 that might affect cashflow for businesses. Download it here: www.hitachicapital.co.uk/invoice-finance/ media/1268/18_cashflowcalendar-final-jan18.pdf. “I’ve heard about R&D tax relief, but I’m unsure whether it applies to me or how and what I can claim.” Many people think R&D (research and design) tax relief couldn’t possibly be applicable to their business: they don’t have a laboratory, it’s never been mentioned by their accountant... The R&D tax relief scheme has been around now for 17 years and yet many companies are not claiming because they do not think their development work is sophisticated enough. It may not be applicable to some, but with an increasing number of printing firms making successful R&D claims to the tune of an average of £66,000 each year, can you really afford not to at least look into it? So, what qualifies as research and development? Well, quite simply, all those times when your team have not been able to routinely solve a technical problem through normal procedures. For example, you win a new client who asks for a high-quality finish on a substrate that you and your machinery are not used to working with. There is little to no information available to help you solve the problem, so you take the knowledge that you have and try to apply it with a series of tests on a small scale. This may involve working with the substrate, ink or machinery manufacturers to gather the information needed. When you are happy you are able to achieve the desired result on a small scale, you attempt to replicate it by producing it on a larger scale and with a consistent product. After a few ‘hiccups’, you manage to iron out the production process and can deliver on your order. By solving this technical uncertainty, you have increased the manufacturing capability of your company, and hence this would qualify as an R&D eligible project. Another potential R&D claim could be for efforts to integrate manufacturing processes into a more automated process or workflow. To calculate the R&D ‘qualifying expenditure’, you need to calculate the involvement of your various staff and contractors in helping reach the solution. In addition, you can include the costs of relevant materials, software licences and some of your utilities’ costs. The scheme allows you to claim retrospectively for your company’s previous two financial periods, with a successful claim for profitable companies resulting in a refund in corporation tax paid, and a cash credit for loss-making companies. There are tax benefits for SMEs of up to £33,350 for every £100,000 of eligible R&D expenditure. Claims are sent with your corporation tax return and assessed by specialist units within HMRC for eligibility. Expert advice on the business of running a garment decoration company Adam Kene is the managing director of Kene Partners, a specialist R&D tax consulting firm made up of a team of engineering professionals with significant experience in preparing the documentation needed to support the claims. They operate a success-fee remuneration model and will conduct a free review of your company to assess eligibility. www.kene.partners Q&A There are tax benefits of up to £33,350 for every £100,000 of eligible R&D expenditure