Two things you must never delegate or hand over control in your business:
- Managing your bank payments to suppliers etc
- Sales and marketing activities
The rest is all fair game to be delegated, outsourced or whatever you care to call it…
Are You Asking the Right Questions?
“The Quality of Your Life is Determined by the Quality of the Questions that You Ask Yourself”
If this quote is true, it begs the question whether we have been digging deep and asking ourselves those powerful questions that might help shape our lives…?
Here are a few to get you thinking:
- “Who” not “How”? (don’t try to do it all – find those that already have the skills and hire them)
- Do you want to work for your business or do you want your business to work for you?
- What are your unique skills? What could you do all day and feel in the flow?
- If money was no object, what would you be doing right now?
- What is stopping you doing that thing that you answered for Q.4. (hint: it’s probably not solely down to ‘money’)
What are the most powerful questions that you have heard or live by…?
3. Optimum Salary Solutions – Personal Allowance v NIC threshold?
2. What are the key tax thresholds for paying myself tax efficiently (2017-18)?
Podcast (remstrat): Play in new window | Download | Embed
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:
Launching our new SEIS / EIS training course
We are delighted to launch our new SEIS / EIS training course. This free course will be delivered via email in a series of bite-sized chunks.
Aimed at company founders seeking SEIS and / or EIS investment, the course should prove to be an excellent primer in helping entrepreneurs educate themselves on how they can make the most of the generous opportunities offered by these government tax incentives – whilst steering clear of some of the pitfalls!
Business angels (both budding and existing!) could also benefit from this course as it sets out in plain English how the schemes operate and points to watch out based on practical experience of working with these schemes on a daily basis.
We hope you find benefit in this course and look forward to your feedback.
Sign up via the form below to get started immediately:
FGB002: Modwenna Rees-Mogg talks raising funding |Crowdfunding | CrowdRating
We are delighted to bring you this second episode of the Fast Growth Business podcast, this week we are pleased to welcome as our guest, Modwenna Rees-Mogg, founder of leading private investor news service, Angel News, amongst other entrepreneurial ventures including a new venture aimed at entrepreneurs called CrowdRating.
This podcast is brought to you by ip tax solutions | the innovation tax specialists.
Useful Resource of the Week
Our resource of the week is Rapportive – a useful Gmail extension that brings your social media connections, such as Linkedin, directly into your inbox. It is a good way of keeping in touch with existing contacts and for reaching out to potential new connections…
Guest: Modwenna Rees-Mogg: Angel News | CrowdRating
In this conversation, we cover how Modwenna made the transition from corporate financier to entrepreneur and founded Angel News which brings thought-leadership and insights into the field of private company investment – aimed at both investors and entrepreneurs.
She penned a book on crowdfunding: Crowd Funding: How to Raise Money and Make Money in the Crowd – at a time that was arguably ahead of the curve (much of her forecasts fortunately came true!) – and has she since co-launched a new venture called CrowdRating – the ratings agency for equity crowd funding. This new venture will be of particular interest to founders and entrepreneurs who might be considering raising funding via crowd funding platforms such as Crowdcube.
Modwenna shares her thoughts and views on the private company investing landscape (including SEIS & EIS) plus her view that most founders’ investors might be closer than they think….
You can listen below or access via iTunes.
Seeking your input
Please get in touch with your questions and feedback via Twitter: @iptaxsolutions and/or #fgbpodcast
If you are a UK entrepreneur and would like to share your story, please get in touch as above. Also, if you are involved in advising entrepreneurs on building scalable businesses, we would be delighted to hear from you and to get you involved if you’re the right fit.
Subscribe to receive future episodes
You can subscribe via iTunes or find us on the BusinessN2K.com network.
Listen to this week’s podcast here:
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Summer Budget 2015: Key tax changes for entrepreneurs
Listen to an audio version of this Summary Budget 2015 round up of the key tax changes impacting on entrepreneurs or read the text version below:
An audio download link is available at the end of this post!
Reduction in Corporation tax
Continuing George Osborne’s pledge to make the UK one of the single most attractive places to do business in the G20 he continued with his downward pressure on the UK corporation tax rates. Not content with reducing the main rate to 20% from 28% not too many years ago, he pledged to reduce it further to 19% by 2017 and down to 18% by 2020.
Before we get too excited about the CT rate reductions, it was once again a “give and take budget” as Mr Osborne announced some far reaching changes to the dividend tax regime that will impact on many entrepreneurs and increases to the minimum wage – the now so called “Living Wage”.
Dividend tax changes
It has long been the case that entrepreneurs could extract profits from their companies as dividends rather than salary – the key advantage being NIC savings as dividends are not (currently) subject to NIC. The income tax suffered on dividends is lower than salary as dividends are only available from retained profits that have been subject to corporation tax – so a tax credit system is applied to dividends that, in essence, results in 0% income tax payable by basic rate tax-payers (so broadly up to £42,000 – £43,000); 25% of the net dividend payable for higher rate tax payers and 30.6% for additional rate tax payers.
Seemingly forgetting about the double taxation impact on dividend payments, the Chancellor announced that there will be a £5,000 dividend allowance from 6 April 2016 (whoop whoop!) and then a 7.5% additional tax applied to dividend income – so our rates now become basic rate: 7.5%; higher rate: 32.5% and additional rate: 38.1%.
Looking at the HMRC projected figures, they are looking to net quite a windfall on this change that is a tax grab via the back-door – I don’t think many entrepreneurs have quite grasped this change as it was positioned as a change that might impact on those with substantial quoted shareholdings and contractors.
Will we see larger dividend payments pre 5 April 2016 with founders leaving credit loan balances to draw down over the foreseeable future?
Employment allowance increase
We should see the £2,000 NIC allowance for employers increase to £3,000 from 6 April 2016
Annual investment allowance
The annual allowance for investment into capital equipment (e.g. PCs, servers, desks, chairs, machinery etc) was set to fall to £25,000 pa by the end of this year but this was increased and pegged at £200,000 for the next five years.
EIS restrictions
There were some further changes to EIS building on proposals from the Autumn Budget Statement that include proposals to cap the total amount that can be raised under EIS at £12m (£20m for ‘knowledge intensive’ companies).
Also, a new limit on companies raising EIS making it available only to those companies that have been trading for less than 7 years (10 years for knowledge intensive companies) – this change seems unreasonably harsh for longer more established companies that might want to access capital. The requirement for 70% of the SEIS cash to be invested before shares can be issued under EIS will also be removed as originally noted in the March 2015 Budget. Finally there was reference to ensuring that EIS funds are directed toward developing companies so there will be restrictions on using EIS monies for buyouts and acquisitions and more of a need to demonstrate that the funds are being employed to develop and grow trading companies.
There were no changes announced to the SEIS regime.
R&D tax credits
No significant changes announced for R&D tax relief aside from a restriction aimed at Charities and Universities to prevent them from claiming the R&D tax relief on work subcontracted to them. This restriction takes effect from 1 August 2015.
Buy to let landlords
Many entrepreneurs will have diversified their risk with potentially one or more buy to let properties within their portfolio. These were also hit with some quite serious changes to the tax regime with the most hard hitting being the reduction in interest relief on buy to let mortgages being reduced to the basic rate of tax only. Currently, landlords can offset the mortgage interest at their marginal rate of tax (so potentially up to 45%). These new rules will be phased in to ease the pain of potential deleveraging for some landlords but the writing is on the wall for many – and who’s to say that this is the end with potential for 0% interest relief in the future….?
There will also be the removal of the 10% wear and tear allowance from 6 April 2016. Yet more pain for landlords.
Pension changes
On the downside, there were announcements that those with total income over £150,000 would be hit with reductions in the amounts they can put into their pension with the £40,000 annual allowance being tapered away with it hitting just £10,000 for those earning £210,000 or more. This is a admin headache all round and it comes into force from 6 April 2016.
On the plus side, there was a consultation announce to explore the best ways for pensions to be saved and a seemingly open approach to considering alternative finance in line with improvements to ISAs – this is great news for our thriving Fintech sector.
Inheritance tax changes
Long discussed and unsurprising was the pledge to increase the inheritance tax level to £1m to allow homes to be passed on without incurring IHT. Slightly odd in that the £325,000 nil rate band remains in place for the next 5 years but we have this additional £175,000 especially for the family home. Inflation may start to dig a hole into that £325,000 allowance rendering this less beneficial over time than the headlines suggest.
It was a shame that we didn’t see any changes to the VAT MOSS / (#VATmess) regime and I think the changes to dividends and pensions will add to uncertainty for many entrepreneurs and their advisors as the goalposts keep moving which is disappointing.
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What will the 7 May election mean for UK tech companies?
As we run up to the 7 May 2015 election, thoughts turn to what the result might mean for UK startup and fast growth companies?
Techcrunch has noted the partisan approach that UK tech companies seem to be taking in writing a letter in support of the Conservative Party and points out that this stance should be taken with a pinch of salt (although I understand the article was penned by a declared Labour supporter ;) ).
I don’t want this to fall into a political rant but I sense there is a lack of transparency in the Labour party’s stance on how it might build on the successes that we have already seen in terms of tax policy for UK tech and fast growth companies.
For example, the Conservatives have made great strides in the following areas:
- The introduction of Seed Enterprise Investment Scheme (SEIS) and its generous tax incentives to support investment into early stage companies to supplement the Enterprise Investment Scheme (EIS) aimed at more established companies
- The improvements made to the Enterprise Management Incentive (EMI) share option scheme to allow participants to benefit from Entrepreneur’s Relief despite potentially not holding the shares for 12 months nor even holding more than 5% of the share capital
- Improvements to the R&D tax credit incentive scheme that now boasts a 33.3% return for claimant SME companies
- Introduction of the Patent Box at its beneficial 10% corporation tax rate – despite challenges from across the EU
- Enhancements to Entrepreneur’s Relief that now allows entrepreneurs to benefit from a 10% CGT rate on the first £10m of lifetime gains
- Reduction in the main corporation tax rate down to 20%
- Plus video games tax relief and other reliefs for creative and digital companies
Taken together these measures keep the UK on track to meet George Osborne’s pledge to make it the most attractive place to do business in the G20.
It is worth noting that many of the above tax incentives were first introduced during Labour’s last bout in office; albeit in a more watered down form in most cases – although who’s to say that Labour might not have followed a similar path had they stayed in the office…? Truth is, we don’t know.
And herein lies the problem…
Labour do not appear to have shared much detail on their thinking and policies around these areas and, in particular, these specific tax incentives. The danger is that an incoming party wants to “shake things up” and “make their mark” which may threaten the stability and progress made around these important areas for UK entrepreneurs.
We may just be about to find out more…
5 essential tax tips for entrepreneurial tech companies – webinar
Description: In this 45 minute webinar, Steve Livingston, founder of innovation tax specialists – ip tax solutions, walks entrepreneurs / founders of UK technology and digital companies through 5 vital tax planning opportunities that are often overlooked – potentially losing out on £100,000’s of cash tax savings!
These 5 essential tax tips are based on UK Government tax incentives that have been enacted to help and support tech and digital companies just like yours…
This free webinar aims to provide participants with an awareness to be able to move forward in exploring these cash saving (and potentially raising) opportunities within your business.
You should ideally be the founder, CEO, CFO of a UK based technology, digital or creative company to get the most out of it.
Date & Time: Thu, May 7th, 2015 at 1:00 pm BST
Registration
Please register for the above meeting by visiting this link: http://iptaxsolutions.enterthemeeting.com/m/FQZFF9B3
Once you have registered, we will send you the information you need to join the webinar.