Are your assets tax efficient?

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1 Are your assets tax efficient? Helping your business make the most of its assets

2 Making the most of your assets All businesses have assets from property, including any fixtures and fittings, to plant and equipment used in the business, through to patents and other intangibles and not forgetting the workforce itself. Assets depreciate, they cost money to maintain and businesses are being encouraged to use valuable cash to replace old assets even though some of them cannot be seen but assets are crucial to a business. When did you last review whether you are getting the most out of assets? Tangible assets Tax reliefs are available for most tangible assets. Unfortunately, many of the reliefs for traditional assets have become less generous in recent years, making it more important to ensure that they are properly categorised for tax purposes. Did you know? Spend on tangible assets of up to 500,000 a year (up to 31 December 2015) can attract 100% allowances. This reduces the effective cost to 80% of the original total. After 2015, the effective cost is expected to rise. By making a simple tax election for assets with a useful life of less than eight years can accelerate the timing of tax deductions by over 20 years. Spend on tangible assets used in research and development (R&D) can attract 100% tax relief. } } Energy saving assets and assets using water efficient technologies can attract 100% tax relief.

3 Intangible assets Many of the most generous tax reliefs are now available for businesses investing in and creating intangible assets. These reliefs range from enhanced credits for R&D, making video games, high-end television and animated films and theatre productions. Orchestra tax relief is due to be introduced in April There is also a reduced tax rate that can be applied to profits of businesses exploiting self-generated patented technology the Patent Box. Did you know? If your product contains even one patented item, the whole of the sales revenue could qualify for the Patent Box. The Patent Box tax rate is currently 12%, reducing gradually to 10% from April Small companies can claim 46% tax relief on R&D spend. Large companies can claim up to 8.8% tax relief on R&D spend. R&D tax losses in small companies can be cashed in at for every 100 of spend. Loss making large companies can, in certain circumstances, cash in tax credits at 8.80 for every 100 of spend. creating intangible assets. Many of the most generous tax reliefs are now available for businesses investing in and

4 People Many businesses say people are their biggest asset. Even though they do not sit on the balance sheet, staff often represent the biggest recurring business cost. Payroll tax rules, national insurance and employment law issues can mean any problems with process can result in large exposures for the business. Did you know? If staff move across borders, for tax purposes a secondment will be treated differently to a transfer. You can save money and reduce tax/national insurance contributions on car allowances through some simple structuring and good record keeping. People tend to underestimate the costs of sending staff overseas by 50%. This can severely impact the profitability of overseas work. } } Companies who have short-term visitors to the UK can still have PAYE obligations even when they remain on an overseas payroll.

5 Many businesses say people are their biggest asset. Even though they don t sit on the balance sheet, staff often represent the biggest recurring business cost.

6 Start the conversation Cheltenham Richard Austin +44 (0) Manchester Rebecca Durrant +44 (0) Kent Simon Warne +44 (0) Midlands Rob Gunn +44 (0) London Laurence Field +44 (0) Thames Valley Stuart Weekes +44 (0) Follow us Find out more about us at Crowe Clark Whitehill LLP is a member of Crowe Horwath International, a Swiss verein (Crowe Horwath). Each member firm of Crowe Horwath is a separate and independent legal entity. Crowe Clark Whitehill LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath or any other member of Crowe Horwath and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath or any other Crowe Horwath member Crowe Clark Whitehill LLP 0097 This material is for informational purposes only and should not be construed as financial or legal advice. Please seek guidance specific to your organisation from qualified advisors in your jurisdiction. Crowe Clark Whitehill LLP is registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales and is authorised and regulated by the Financial Conduct Authority.