Introduced in April 2013, the patent box regime allows companies owning a patent or holding an exclusive licence for a patent to pay corporation tax at a lower rate of 10% on the profits attributable to the patent rather than the usual corporation tax rates of 23% or 20%.
The Patent Box regime is open to certain qualifying companies;
To qualify for Patent Box a company must either
- Own a patent granted by the UK Intellectual Property Office, the European Intellectual Property Office or one of certain patent offices in the EEA.
- Hold an exclusive licence over a patent granted by one of the above offices.
In addition, the company or a company in the same group must have significantly contributed to the creation of the patent or contributes to the development of the patent or the products it is used in. Alternatively for group companies, the company must demonstrate that it is involved in the active management of the patent if it has not been involved in the development of the patent itself.
Calculating the Tax
The profits which can be taxed at the reduced rate are the profits associated to the income of the patented product less statutory deductions for routine and marketing activities.
Qualifying income includes sales of patented products, sales of products with patented components (regardless of how small the component may be) or licence fee income derived from a patent.
Patent box applies to profits arising to new and existing patents from 1 April 2013 and are taxed at a reduced rate which falls to 10% by 2017, much lower than the headline rate of 23% or 20% rate for small companies.
If your company holds any patents or if you have not yet considered registering a patent and would like to discuss how you may qualify for the patent box regime, please contact Clare Vaughan on 01872 271655 or email@example.com.
With the increasing trend in recent years to move small companies away from the regulatory need to undergo a statutory audit, it is still worthwhile considering the benefits an audit can bring to an organisation.
- An audit can assist in identifying weaknesses in both the company’s accounting and control functions.
- The process will necessitate close working between the client and the auditors, leading to the auditors having a better understanding of the business and greater ability therefore to provide business recommendations and advice.
- Audited financial statements will enhance the credibility of the figures provided to the bank, lenders or grant funders for example.
Audit Director, Clare Vaughan, said of the Kelsall Steele process “We no longer view an audit as a ticking exercise but as a real chance to understand our clients’ businesses and hopefully assist them in tightening their accounting function, their financial control procedures and highlighting any areas of improvement. By working on site at our clients’ premises, we also feel we can gain a greater understanding of what is important to the Directors in running their companies.”
If you’d like to find out more about Kelsall Steele’s audit process and how it could be of benefit, you can contact Clare Vaughan on 01872 271655 or email firstname.lastname@example.org
HMRC are writing to all charities who have made gift aid claims in the past 3 years encouraging them to sign up for the HMRC Charities Online service. Launched in April 2013, this service allows for charities to make their claims for gift aid online rather than submitting the traditional paper form R68(i).
Although it is currently still possible for charities to submit gift aid claims by paper, from 30 September 2013 HMRC will no longer accept claim form R68(i) and reclaims can only be made online via the Charities Online service, or for larger claims (1,000+ donors) via third party software.
There are provisions in place for those without access to the Internet; in which case you would need to contact HMRC to order form ChR1
Signing up to the service is a straightforward process and instructions for signing up to HMRC Charities Online are available from the HMRC website. Initially, you will need to create an account with HMRC Online Services; you may have already done this, for example if you submit VAT returns online. Once signed-up and logged in you will be able to enrol for the Charities Online service.
HMRC provide full guidance on making a claim using the Charities Online system, however Kelsall Steele are on hand should you require assistance at any point in the process.
If you would like to discuss making a gift aid claim or HMRC Charities Online please contact Clare Vaughan on 01872 271655 or e-mail email@example.com
Tax payers have until 9 August 2013 to notify HMRC should they believe the Property Sales Campaign applies to them and until 6 September 2013 to make a disclosure to HMRC and settle any outstanding tax liability. After this date HMRC will utilise their intelligence in order to analyse the tax affairs of taxpayers believed to have under declared their capital gains tax liability in respect of property sales.
This latest campaign from HMRC is aimed at individuals who have sold a residential property or properties in the UK or abroad where capital gains tax should have been paid but who have not disclosed the sale to HMRC previously. Most commonly relating to the sale of rental properties or holiday homes this campaign does not apply to sales of your main home as such disposals are normally covered by principal private residence relief. It would also not apply to individuals who buy and sell property as a business as this business would be subject to income tax rather than capital gains tax.
Although HMRC make it clear that any disclosures made to them throughout this campaign will not result in the taxpayer avoiding being penalised, they will typically be treated in a more favourable light.
Director Clare Vaughan said: “This campaign provides an opportunity to people who may not have previously realised they should have paid capital gains tax to disclose the sale, and anyone who believes that this may apply to them can call Kelsall Steele as soon as possible to discuss their situation.”