Here’s an audio summary of 10 key benefits of the UK R&D tax credits government tax incentive from our R&D Tax Credits podcast.
Hi, my name’s Steve Livingston, and welcome to this podcast on R&D Tax Credits. Something a bit different in terms of how we can really share the information and help more companies access this very generous UK government tax relief.
First and foremost to introduce myself, my name is Steve Livingston, I’m the founder of a tax advisory firm called IP Tax Solutions. I’m a chartered accountant, and I’ve been advising companies for fast approaching 15 to 20 years, so fairly experienced in this area, and especially how we do tax reliefs. I have been a qualified Chartered Accountant since 2000.
So, I’ve worked with a lot of companies across a diverse range of sectors, and I think that’s one important thing to note from outset here, this research and development tax relief applies to pretty much any company in any sector. And so you may well find that you’re a founder or a director of a company, and you may have heard of this relief, but you may not be quite sure how it could apply to you.
This podcast aims to run through a series of questions about how it really works in practice; how it may apply to you and really answer frequently asked questions. That’s the format we’re going to take here so you can maybe pick and choose which ones you want to listen to. You can listen to them all if you like. Fill your boots! But you don’t have to do that at all, it’s really a case of giving you an awareness, and I should say in terms of legal blurb this isn’t professional advice, this really is just a case of education, and hopefully some entertainment on the way, as you can learn more about how this tax relief could benefit you.
So, without further ado let’s jump into the episodes. We’re going to try and cover a question in each podcast episode. We’ll aim to be quite short and snappy, so that you don’t have to get too bogged down in detail. But if you’ve got any questions you can of course shoot them over to me. You can find me at iptaxsolutions.co.uk. I also have a site at businessn2K.com. Or you can find me over an email, which you’ll find via those websites.
Again, let’s dive in. As I say, my name’s Steve Livingston. The people who are going to benefit from this podcast are really founders, directors of primarily SME companies, or they may be in charge of a large company, but hopefully find these of use. That’s all for now, speak to you soon.
If you haven’t already set goals for yourself and your team then recent research further strengthens the argument that effective goal setting improves performance and results.
“We found that specific, difficult goals consistently led to higher performance than urging people to do their best….In short, when people are asked to do their best, they do not do so…..This is because do-your-best goals have no external reference ….This allows for a wide range of acceptable performance levels, which is not the case when a goal level is specified.”
You will no doubt be well aware of the importance of using specific or SMART (Specific, Measurable, Achievable, Realistic and Time-bound) goals and this research further emphasises this need. The research paper goes on to explain 4 mechanisms by which goal-setting improves performance:
- Goals serve a directive function; they direct attention and effort toward goal-relevant activities and away from goal-irrelevant activities. This effect occurs both cognitively and behaviourally;
- Goals have an energizing function. High goals lead to greater effort than low goals;
- Goals affect persistence. When participants are allowed to control the time they spend on a task, hard Goals prolong effort;
- Goals affect action indirectly by leading to the arousal, discovery, and/or use of task-relevant knowledge and strategies.
Goals are often set for team members in larger organisations as part of the (dreaded!) annual appraisal process, however, my own observation is that these goals are rarely kept front-of-mind – frequently being filed away until the half year and then year end appraisal. Given the findings above, are businesses missing a trick in developing a high performance culture?
The research points to the importance of inclusive or participatory goal setting to allow for information exchange, however, it is vital that an ongoing feedback loop is maintained so that team members know and are constantly reminded of what they should be focusing on and how they are performing against their written goals. How often does this happen in businesses?
As high performance coach Brian Tracy famously notes:
“3% of the population have written goals and plans for how they will achieve them. The remaining 97% work for these people.”
What are you doing to build a high performance culture in your business?
Right now, the world needs more Leaders.
Business Leaders. Community Leaders. Not-for-Profit Leaders…. the list goes on.
Leaders have to push themselves out on a limb. Leaders have to stand out from the crowd. Leaders must push the status-quo and challenge accepted ways of thinking. For these reasons, being a Leader can be isolating.
So what is the catalyst that can turn individuals (often initially perceived to be) “lone lunatics” into admired Leaders of Movements?
Answer: a 1st Supporter
Being this 1st Supporter demands bravery (just as brave as being the (about to be saved) isolated, lunatic Leader). The first supporter is often accepted as an equal by the leader – perhaps an element of relief from the Leader to find a kindred spirit. The 1st supporter needs just one more person to join for a crowd to emerge (i.e. 3, the Leader + 1st supporter + 1 other). From this crowd, a Movement can develop.
Nowhere is this more perfectly demonstrated than in the above talk by Derek Sivers. Watch how the (initially) perceived dancing “nutter” is quickly enveloped by those eager to become part of the in-crowd – those who had, up until a few minutes before, watched with a mixture of amusement and horror from the safety of the crowds. But they stood up and joined in – all due to the bravery of that 1st supporter. Fascinating stuff.
Lesson: Great Leadership can only emerge by virtue of that single 1st brave supporter.
So can you see an opportunity to be THAT 1st Supporter and be the much needed catalyst to help create a Movement?
Today’s Financial Times had an interesting article about the widening wealth gap opening between generations.
The synopsis is that the Baby-Boomers aged 55-64 hold double the wealth of Generation X aged 35-44. Worse still, it is believed that Generation X will never achieve the level of wealth of the Baby-Boomers given factors such as the fall in pension benefits (especially final salary schemes – now pretty much the preserve of the Baby-Boomer Generation!) and the rising fiscal burden falling on Generation X to support ever extending life expectancy (aside from our budget deficit).
It reminds of a recent conversation I had with a friend who was day-dreaming about winning the Lottery to achieve his financial and lifetime goals. Without wishing to shatter his illusions (I did!), we discussed the only real way to achieve financial success:
Building your own business.
This is the only way for most people to achieve financial freedom or even millionaire status. And a surprising number of everyday folk do. I’ve met many self-made millionaires. I’ve never met a lottery winner…
So if Generation X are to bridge the wealth gap with the Baby-Boomers, we need to encourage more entrepreneurs. More start-up businesses. More support for early stage and growing companies. Perhaps the creation of more micropreneurs…?
Thomas Power makes the assertion that there will be no jobs by 2030 in the excellent Smarta ebook Smartest Brains 2010 and beyond!
Meanwhile Seth Godin pleads with us to become indispensable in his latest book Linchpin arguing that the Industrial Age model of work is over – therefore if your current job involves tasks that can be broken down into process-driven bits then you can kiss this job goodbye in the not too distant future due to a combination of globalisation and automation.
Are they right? Dan Pink argued along similar lines a few years back in A Whole New Mind and there’s little doubt that our concept of work has to change in today’s Knowledge Economy. We are now paid to think rather than do.
I suspect that by 2030 manual jobs will still exist at the lower end but perhaps the real risk lies in store for middle-managers and professionals with process driven roles. We have already seen this emerging in the latest recession with the introduction of the 4 day work week and mass redundancies. Highly educated professionals, particularly those in their late 40s-50s who have followed the accepted path, have been left feeling disillusioned – and unsure where to turn next…
Has the Industrial Age managed to turn us all, including educated professionals, into dependants? If so, we now need to rediscover our latent entrepreneurial talents and tolerance for change and instability (not something that most of us are naturally predisposed towards).
I believe we will see 2 primary worker-types emerge over the next 10-20 years:
- Highly networked freelance workers
- Portfolio workers
The highly networked worker represents an entrepreneurial type. Someone who runs one or more businesses, probably mostly outsourced. This would also encompass certain professionals who are deep specialists in their area of expertise and are called into teams to work on specific assignments on a project-by-project basis. These people are the more entrepreneurial types and may well have left the corporate world to do their own thing at some stage in the future anyway.
The biggest change would be for the newly labelled portfolio worker. These are the people who would have quite happily worked for the same company for life – or at least for many years, perhaps choosing only to move on to another steady job if things changed for the worse or there was an opportunity for promotion and progression elsewhere. Rather than have one job – they might end up with 1,2,3,4,5,6,7 day-jobs per week? A day here and a day there.
The latter model may initially sound unappealing, however, as I discussed with Ian Sanders, adopting a portfolio or plurality approach to work opens up new and exciting opportunities. Imagine if your average week went from working 9-5 for the same company to say:
- Monday – fulfilling orders, marketing and general running of online home business.
- Tuesday – work for Company A as a part-time financial director (FD)
- Wednesday – charitiable activities e.g. tending to trustee responsibilities and planning events
- Thursday – mixed day. Update books for online home business am. Complete freelance financial consulting work pm.
- Friday – back to Company A for the day as FD
Think how much Company A would benefit from a fresh, revitalised worker plus the insights gained from the plurality of work. Likewise, from the portfolio worker’s perspective, think about the variety enjoyed in a working week by adopting a portfolio or freeformer approach.
It is easy to paint a gloomy picture of the future of work. We need to remind ourselves that the Industrial Age has only been in existence for 100+ years and we were self-sufficient for 1000’s of years before this Age of Dependency.
By preparing ourselves now both mentally and practically, the future of work looks exciting and I suspect that in years to come people will look back and think that the concept of a Job for Life was a missed opportunity rather than the panacea that we all grasp after today.
Look forward to your comments and thoughts.
You may think that you are in charge of your business, however, in the digital age of social media where anyone has the power to comment on your business and influence both local and global opinion (either via blogs, Twitter, forums, Facebook etc), is this still the case?
There have been many recent high-profile incidents where global brands have been forced to change direction commercially or, at the very least, acknowledge the comments and feedback of disgruntled customers whether they wanted to or not e.g. Dell, Apple are a amongst a distinguished line-up of apologetic global brands.
A few harsh and frank words typed into a blog, Facebook, Twitter or a video review posted to YouTube has the power:
- at worst to bring about a viral movement resulting in an army of disappointed individuals congregating online who collectively could cause serious harm to your business, or
- at the very least rank some negative feedback within Google ready to leap out the next time your dream prospect does a search on your business in Google (and they will).
There is nothing you can do to stop this – and why should you?
Feedback is a gift after all whether positive or negative. It is how you deal with negative feedback that is key when the eyes of the world are watching…
A recent study showed that potential customers warmed more to businesses who had negative feedback but took proactive steps to remedy the complaints compared to those that bathed solely in positive feedback. However, for this strategy to be effective it is vital that you are listening for comments made online about your business – and act on it (quickly).
A good example is my local hostelry, The Swan Hotel in Tarporley. A thoroughly nice country pub and hotel with largely 4-5 stars on Trip Advisor. However, scroll down through the recent reviews (as most people do) and you can’t help but be drawn to a review that gives 1 star and says “Child unfriendly”. Read on and the reviewer goes on to berate the hotel and service for a whole host of cock-ups. Left unattended this review leaves a huge black mark against the rest of the positive reviews and, on personal a note as a father, I’m sure I would be scouring through for alternative child friendly options.
The good news is that the owners of the Swan Hotel were listening and promptly posted the following apology under the review:
Problem (not only) solved but turned into a positive.
Be under no illusion, you are no longer in charge of how your business is perceived. Your business will be held accountable for every action it takes and it will receive continual feedback. Your job as business owner, manager or employee is to listen, respond, engage and use the feedback to continually improve and adapt your products and services.
In this way, your millions of managers can help keep your business on track far better than you could alone.
You often hear successful CEOs say: “I couldn’t have done it without my team” or “We’re a People Business and our people are our greatest asset”. These hugely successful businesses all appear to have great people.
But is it the luck or skill of the CEO in finding these “great people” or is it that great businesses draw out the great in people?
I believe it is the latter – let me explain:
A great business has a clear and compelling vision. It has a mission. A mantra. A reason for existing. It is (or aims to be) the best in the world at whatever it does. It makes a difference. A contribution to society. The World.
A great business infuses a passion in those that work for it. They can clearly see the vision in front of them. They want to see the vision fulfilled. To see the difference being made or the problem solved. This is not ‘work’ in the ‘clock-in, clock-out sense’, this feels more like a ‘calling’. Going to work brings a sense of fulfilment. A strong team dynamic is established as people work together in line with the shared vision.
A great business draws out the great qualities of the people that work there. People feel great. People become great. In turn, businesses become great.
So are you a “people business” and if so, what are you doing to build a great business that allows your great people to flourish?