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As of 8 August 2023, all Research and Development (R&D) Tax Credit claims require the submission of an online Additional Information Form (AIF) providing supplementary project details.

The form must be completed prior to the submission of the company tax return. If the form is not submitted, the R&D claim will not be incorporated into the company tax return (CT600).

The form can be completed by a representative of the company or an agent, but it must include information about the senior internal R&D contact who is responsible for the claim, as well as any agent involved in the claim process.

HM Revenue & Customs (HMRC) has expressed concerns about the behaviour of some agents in relation to R&D.

The requirement for details about the agent and a senior responsible individual is designed to foster transparency in the claim process and ensure that R&D compliance is supervised at a high level within organisations.

The form applies both to ongoing projects and accounting periods that have already concluded.

Companies must capture all necessary information, and they may need to adjust their internal systems to collect this information efficiently.

The form also demands details about qualifying expenditure, encompassing qualifying indirect activities and specifics about the R&D projects undertaken.

Companies with a large number of projects can provide information about a selection of the projects, but this must include at least three projects that account for a minimum of 50 per cent of the qualifying R&D expenditure.

Details must also be provided of advancements in technology, the technological baseline, the technological uncertainties, and the strategies used to overcome them.

There are concerns among some advisers that current reports may not meet the new requirements, particularly if the projects are similar and relate to the same technological uncertainties.

Allocating costs between projects may also pose challenges, potentially leading to increased administrative costs for businesses that comply with the new rules.

Unsure of how these changes affect you and your claims, now and in the future? Speak to our experienced team today.

Introduced in 2014, Employee Ownership Trusts (EOTs) provide an attractive alternative to traditional business succession strategies, offering a series of unique benefits to businesses, their employees, and the wider economy.

Employee engagement and productivity

One of the most immediate benefits of EOTs is their positive impact on employee engagement and productivity.

As beneficiaries of the trust, employees have a direct, vested interest in the success of the business.

They become not just workers, but also part-owners, which nurtures a stronger commitment to the company’s objectives.

Studies suggest that companies with engaged employees perform better on multiple measures, including reduced absenteeism, increased productivity and higher customer satisfaction rates.

Financial incentives

From a financial perspective, EOTs also offer significant benefits. For business owners looking to sell, the sale of a controlling interest (more than 50 per cent) of the business to an EOT is free from Capital Gains Tax (CGT), providing a cost-effective route for succession planning.

The employees, as beneficiaries of the EOT, also gain the opportunity to receive tax-free bonuses, up to a capped limit per annum.

These incentives can result in substantial tax advantages for both the selling owners and the employee beneficiaries.

Stability and longevity

EOTs promote business stability and longevity, particularly in the context of succession planning.

In contrast to a traditional sale of a business, where future directions may be uncertain, a sale to an EOT ensures that the business continues in a manner consistent with its established values and goals.

The employees, many of whom may have dedicated significant portions of their careers to the business, are naturally invested in its continued success.

This can reduce business disruption during the transition phase and enhance long-term business prospects.

Economic resilience

On a macro level, businesses owned by EOTs contribute to the resilience of the economy. Research has shown that employee-owned businesses are less likely to fail during economic downturns.

This resilience stems from their focus on long-term sustainability over short-term profits.

Additionally, they are more likely to retain employees during tough economic times, providing stability at a company and community level.

Societal impact

Finally, EOTs can foster a sense of social responsibility and collective welfare.

Businesses owned by their employees are often more invested in their local communities, contributing positively to societal welfare.

EOTs offer a robust alternative to traditional business structures and should be considered as part of a business’s succession or exit planning.

These trusts are likely to play an increasingly significant role in shaping a more inclusive, resilient, and sustainable business environment. If you would like advice on EOTs, please speak to us.