14+4 = 18 (v Brexit)

For all the naysayers and dooms-day Brexiteers out there, here’s one for you:

“14+4 = 18”

So the theory goes that the land cycle has run to this formula over the past 200+ years of recorded history. Research suggests that the economy follows the value of land (theory of economic rent… and all that!).

More specifically the theory is that the land cycle has followed a period of 14 years up (until it hits its peak) and then four years down (14+4); and this cycle has repeated itself over the past 200+ years. So this cycle repeats every 18 years or thereabouts.

You can watch Phillip Anderson (a big time proponent of the 14+4=18 theory) explaining it here:

You can see an example of the real estate graph here:

When was the last 14+4?

So we had a peak in the late 1980s and then a bust in 1992. The next peak was 2006-07 followed by 4 years of downturn.

So where does this leave us now?

So if the 14+4 theory is to hold up, the next kick up from the last downturn should have started around 2011ish and should run up to 2025 before the next crash. So we are now in the relatively early stages of a 14 year bull cycle, despite the negativity that is swirling around us.

Sure, there will be ups and downs along the way (Brexit, anyone?) but it will be interesting to see how this plays out against hiccups such as Brexit and whatever else might be heading down the pass….? It is interesting to note that stockmarkets across the globe are hitting new highs – so the early stages look promising.

Food for thought as you plan for the future in your business against what might otherwise appear to be a negative macro economic backdrop?

Launching our new course on the HMRC SEIS / EIS advance assurance

Delighted to have launched our new online step by step guide to preparing and filing an Advance Assurance Application to HMRC that your company qualifies under SEIS and / or EIS!

Really brought about by popular demand and to fill a gap where some companies simply don’t have the budget to take on a professional firm to carry out the preparation work and specific advice on advance assurance applications (although I am afraid this can never be a substitute for this).

The course has been called: The SEIS / EIS Advance Assurance DIY KitIt is really aimed at founders / entrepreneurs to give them a bit of a helping hand. The hope is that for 90% of applications, this might be enough and will therefore result in huge cost and time-savings all round.

As well as a 40 min run through the form and how to complete it, we’ve also chucked in a template of a letter that we use to supplement the standard (limited!) EIS/SEISAA Form. You can use this for your application too.

Some links to further resources rounds off what is hopefully a useful addition to the startup community.

You can access this new online tutorial course on completing your SEIS / EIS advance assurance form here.

R&D Tax Credits – A new podcast for Founders of Clever Companies!

Audio transcript:
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.

7 R&D Tax Credit Tips

  1. Don’t assume your company doesn’t qualify – even if your accountant has discounted it or perhaps not even mentioned it (in fact that might be all the more reason to check it out!)
  2. It doesn’t matter whether your company is profitable / tax paying in a financial period or loss-making – R&D tax relief can benefit you and release cash into your business in both cases
  3. Think about R&D tax relief and how it might apply to your company as early as possible. This way you can ensure that you are capturing relevant supporting information, documents and costs as you go along – rather than trying to cast your mind back and rebuild retrospectively which might lead to sub-optimal claims
  4. Don’t discount R&D tax relief if you carried out eligible activities a couple of years back thinking you’ve missed out – you can make a retrospective claim for accounting periods ending in the past two years. So at the time of writing this post (20 June 2016), say you have a 30 June financial year end then the periods ended 30 June 2014 and 30 June 2015 are still open and eligible for R&D tax credit claims.
  5.  Don’t wrestle with the definition of what activities qualify for R&D tax relief on your own – many companies wrongly count themselves out when a quick chat with a R&D tax specialist might have helped them understand how they do qualify. Many company owners are stunned at the breadth of the R&D tax relief.
  6. Don’t think you have to leave your current accountant to access specialist R&D tax advice – most R&D specialists will supplement the good work your accountant is already doing for you with their specialist R&D tax services so this needn’t upset your ongoing accountancy support relationship.
  7. Think about how the UK R&D tax incentive can fit into your overall funding profile – so tax advantaged funding such as SEIS / EIS can typically be used in harmony with the R&D tax incentive. Watch out for grants as these can impact adversely on the levels of tax relief available under the R&D tax incentive. Cash tax breaks such as the Patent Box can be used alongside the R&D tax relief. As you can see, thinking about how this can all fit together sooner rather than later will help optimise available funding.

SEIS / EIS: When it pays to be Ordinary!

I know it’s not cool to aim for being ‘ordinary’ and its not a label that you’ll want attached to your business but when it comes to your SEIS / EIS shares this is exactly the label you want – ordinary shares.

SEIS / EIS shares must be ordinary non-redeemable shares and carry no preferential rights to dividends or assets on a winding-up.

If you have institutional or other non SEIS / EIS investors then things can become more complex, if they say want preferential rights in relation to certain aspects of the business.

In this scenario, differing share classes would typically come into play with say ‘A’ shares for the founders, ‘B’ shares for VCs (both classes may have some preferential rights to varying degrees) and ‘C’ shares for SEIS / EIS investors – these being the ‘highest risk’ ordinary shares.

No one-size fits all but this gives you an idea. If you are going to go down the road of different share classes then bear in mind that this will require formal legal procedures to give effect plus amendments to the Articles of Association of the company (this goes beyond the scope of this course – get yourself a decent lawyer!).

This is a just one of a series of emails from our SEIS / EIS course – you can subscribe to the course below:

SEIS / EIS is on the rise!

Judging by the rapid uptake in the number of calls and enquiries we are receiving on a weekly basis from entrepreneurs and founders looking to ensure that their company is SEIS / EIS tax ready – I think it is fair to say that SEIS / EIS tax benefits are now getting the attention they deserve!

So if you are a star company looking for rapid growth and you’re in search of investment, then you really need to get up to speed with the tax benefits that SEIS / EIS government tax incentives can potentially bring you.

I’m afraid to say that it can be quite complex in parts – good news is that we’ve set up an email course to help you swot up!

You can access it here: