Business Connect are always on the lookout for help and guidance on behalf of their readers for ways of helping businesses flourish. A good accountant can be the key to this, helping to navigate UK tax law and offering opportunities in the form of tax breaks to help businesses grow.
Cash flow is crucial to any successful business, and to be tax efficient involves knowing where every opportunity lies, which in turn can offer a massive help to any company’s bottom line. Silver Consultants work nationwide offering accountancy services to businesses of all sizes and across all sectors. They specialise in R&D Tax Credits and Embedded Capital Allowances, as well assisting those who have Personal Guarantees where the company cannot pay the debt. Founder and Director Russell Silverman took some time out to chat with us:
Russell – please tell us how it all began?
“I qualified over 40 years ago now. After gaining my BA(Hons) in Accountancy I went on to a further 3 years training at a large International practice. From there I joined the Liverpool office of the North West practice of Gruber, Levinson Franks, becoming partner within a few years.
“During my 18 years at GLF I helped develop the business from a small office to one of the top firms in the city, and in 1999 merged with the Liverpool office of Haines Watts, one of the largest practices in the UK. At Haines Watts, we also expanded, adding an office in the Wirral, and setting up another business to offer specialist tax services. I was also involved in various committees which formulated strategy for the future of the business nationally.
“In 2019, Silver Consultants was set up, and I’m now making it a priority to offer a specialised tax management service to businesses alongside high quality traditional accountancy services.”
Can you list your services in more detail?
“The core of our business is to offer high quality fully qualified Accountancy services to businesses of all sizes and across all sectors and regions. We specialise in R&D Tax Credits and Embedded Capital Allowances, which save tax, and Personal Guarantee advice and support, which, in the majority of cases reduces the amount owed by the individual.”
Tell us about your more specialised areas of support – in particular Embedded Capital Allowances?
“Many business owners appoint a good accountant who can reassure them that their business is safe, explain the way the system works, and how they can legitimately save tax and save for the inevitable tax bill. Many tax-deductible expenses are routinely covered by most businesses and their advisers.
“However, occasionally some things slip through the net, and there are some tax claims, that in my experience, are regularly overlooked by both client and adviser. As an accountant it’s important for me to share these opportunities, so you can check that they are being included in your return. Being aware and including them seriously improves your cash flow.
“Embedded Capital Allowances is a tax claim available for individuals or Limited Companies who are commercial property owners, or tenants who refurbish properties. Commercial properties will include office blocks, factories, warehouses, hotels, pubs, care homes, restaurants – basically any building in which a business is located. Even sports grounds.
“The basis of the claim is often described as what doesn’t fall out if the property is turned upside down. It covers items situated in the fabric of the building such as wiring, air conditioning systems, plug sockets, etc. It is estimated that an average of 26% of the value of properties in the UK can form part of a claim.
“Not many know about this claim, even accountants, and many accountants that do know about it do not have the expertise to do the work. Even HMRC describe this in their internal manuals as a difficult claim to make. However, when it is lodged it’s a nice surprise for the recipients. I have recently become involved in a hotel redevelopment where the potential tax saving is approximately £250,000.
“Another current assignment is a building that incorporates a dental surgery where it looks like there’s a refund of £50,000. Every commercial property owner, or tenant, should investigate this tax saving opportunity.”
How about R&D Tax Credits – there’s quite a bit of confusion in this area?
“Research and Development (R&D) Tax Credits is a claim that is more widely known, but frequently misunderstood. It is a government reward for innovation, available to Limited Companies, given out as a tax saving.
“Many see this as scientists in white coats, who wear thick glasses and spend all day locked in a room with bunsen burners. The work by the scientists will qualify, but most claims are from ordinary businesses doing everyday things.
“What is misunderstood is that normal work tasks or ideas may be part of a claim. For example, experimenting with a new product or process may qualify, even if it fails (my biggest claim so far related to a potential new product that never reached the market).
“Similarly creating a new database from scratch can qualify. Again, many are surprised when they successfully claim a tax saving.
“One client, a windows manufacturer, repeated to me so many times ‘We don’t do anything special’ that it became a running joke. He received £70,000 in his bank account for ‘nothing special’.
“There is a deadline of two years from the end of a financial period to file the claim, which means that many first-time claimants file two claims at once. This means that one of those years regularly produces a refund of a tax bill already paid, while the other acts to reduce a future tax liability.
“One other important point is that where a company makes a tax loss, it can elect to receive a R&D related refund, even if no tax has been paid previously. This is unusual as normally you need to pay tax to get it back. I have been involved in long term projects, for example app development, where HMRC have provided finance, by way of an R&D refund to a loss-making entity, which has assisted the eventual success of the venture.
“R&D claims can be made every year, helping the cash flow of a business and providing funds for business development and recruitment. It should always be considered as part of the overall financial planning strategy of a business, and the sooner the areas of R&D claims can be identified, the sooner those funds can be reimbursed by HMRC.”