29 Sep 2017 | 12.04 pm
Interview: Sean O’Neill, TaxBright Accountants
'We understand the R&D tax credit system'
29 Sep 2017 | 12.04 pm
Sean O’Neill, Practice Manager of TaxBright Accountants, is a chartered tax advisor who specialises in providing tax planning, business advice, personal tax planning and succession planning for entrepreneurs and shareholders.
In your dealings with business clients, what tax planning or tax resolution issues are of most concern to them at the moment?
Businesses and their owners are all at different stages of their lifecycle so there is no ‘one size fits all’ response here. However, the tax work which is most popular on an ongoing basis is in relation to best corporate structures to minimise business taxes and succession planning for business owners to minimise personal taxes.
What are their Brexit concerns?
I think most business owners fall into 2 categories here; one group haven’t let it concern them as no one really knows what the outcome will be. The other group, largely those with a substantial portion of their business reliant on the UK market, are worrying and considering all aspects. The biggest concern is what the access to the UK market will be post March 2019.
Our advice to all clients, especially those with a UK relationship, is to concentrate on streamlining operations to cut costs and be more competitive, and also to work on building relationships with alternative markets where possible. Thinking outside the box here is necessary and we facilitate those sessions.
A recent ITI survey found that of companies availing of the R&D tax credit, almost half found it difficult to prepare and administer. What are the main pitfalls you encounter with clients?
The biggest pitfall is not knowing what is an allowable expense. That includes trying to claim for non-allowable expenses but also not claiming for expenses which would have been allowable. The level of administration in record keeping and proof is often beyond the reach of most SME’s in terms of cost.
And how can your firm help?
The R&D Tax Credit is claimed by almost 1500 companies annually. It gives 25% of the qualifying expenditure back to the company which is a great cashflow boost. Taxbright tax advisors understand the R&D Credit system. We know the costs which can be incurred, and more importantly we know what questions Revenue are likely to ask (and they will ask!).
Because of our in-house tax knowledge and expertise in making claims we can come to a decision quickly and give certainty on the costs of making the claim. In our experience, a claim that is properly prepared prior to submitting it will likely withstand a Revenue challenge.
Generally speaking, do you think business owners could be more proactive in engaging regularly with a tax adviser?
I think any profession will declare that their potential customer pool should use them more! Smart business owners realise Tax isn’t just about compliance anymore. It’s about planning for growth, planning for opportunities, and ensuring the right structures are in place to give their business a platform to adapt quickly to changing market trends. Smart business owners are engaging with their tax advisor to get this balance right.
A business owner is five years out from projected retirement – what are the important tax issues to plan for?
Succession is certainly the main one, but this plan should be in place well in advance of 5 years from retirement. Minimising taxes on the transfer of assets is key to ensuring a comfortable retirement for the retiree and ensuring those taking over the stewardship of the business aren’t crippled with large tax bills on the transfer value of the business.
What tax reforms would you like to see to assist business in the upcoming Budget 2018/Finance Act 2017?
Business owners create employment. Those exporting contribute to economic growth. There should be measures to reward both in a meaningful way.
Often a business owner earning the same amount as their employee has less entitlement to State benefits and tax reliefs. While some move has been made to level the playing field, it actually needs to flip in the other direction. Reward the risk-takers more. They’ll create employment and add to economic growth. If they know when they fall that the pain might be lessened, we may well see more people go out on a limb to establish successful businesses that employ more people.
Also, the point at which a person (both entrepreneur and employee) reaches the high rate tax band is a major disincentive and has to be addressed urgently. The lowering of other tax rates, particularly CGT, will help in incentivising business.