Having worked for many years with a wide range of manufacturing and engineering clients, our team of specialist accountants have first-hand experience and understanding of the current issues within the sector.
Our proactive approach and expertise means that we are able to keep clients one step ahead of the issues that may affect them. These include:
Patent Box Relief
How would you like to halve your rate of corporation tax? The Patent Box is not just for scientists; often it is manufacturers that benefit. Nationally, the take-up of Patent Box has been slow but with clear benefits we can help you save tax using the new relief. Profits from a product that includes a patent, or a manufacturing process that is itself patented, will qualify for reducing amounts of corporation tax. Patented profits from 2017 will be taxed at 10% rather than the normal 20%.
R&D Tax Credits
Are you aware of the Government’s Research and Development (R&D) tax credit scheme, designed to encourage innovation by providing financial incentives to companies engaged in innovative activities in the fields of science and technology? If your company is involved in developing new technology and products, seeking solutions to technical issues or seeking further efficiencies and advances in existing processes, then you may well be undertaking eligible R&D activities that will qualify for the tax incentives available. A vast number of manufacturers are yet to claim for R&D tax credits.
Annual Investment Allowance
The Annual Investment Allowance enables UK businesses to write off 100% of the cost of newly acquired assets such as plant, machinery, equipment & commercial vehicles in the first year of ownership. The amount of the allowance has been subject to regular changes since its introduction in 2008, but from 01 January 2016 it is now fixed at £200,000. As manufacturing is a capital intensive industry, this reduction in the AIA threshold significantly helps productivity, but timing of expenditure is important for tax planning and therefore businesses are advised to seek advice from a specialist in tax planning for the sector.
Enterprise Management Incentive
Does your business have assets of £30 million or less? You may have, or be considering, the Enterprise Management Incentive (EMI) - a share option scheme enabling employees of smaller companies to purchase shares of up to £250,000 with tax/National Insurance advantages. However, business owners need to be aware of the conditions of the scheme and the type of events that may cause disqualification or risk loss of tax-advantaged status. It is recommended that companies participating in the scheme ensure they are receiving accurate guidance from qualified accountancy specialists to avoid making a loss through the scheme.
Shortage of skills and succession plans
Due to the nature of the industry, the need for highly-skilled workers is at an all-time high, and the existing gap between the level of qualified workers entering the industry and actual demand is only set to increase. To accommodate this, succession planning is required to ensure that jobs are filled as employees retire from the profession over time. For this reason, it is important that manufacturing and engineering organisations seek proactive advice from an accounting firm that understands the complexities within the sector, to ensure that the right planning is in place to address such major issues.
Apprenticeship Levy Rate
To address the skills gap among larger businesses within the industry, the apprenticeship levy rate has been raised to 0.5% of payroll costs, due to start in April 2017. It is likely to positively impact on SMEs in terms of recruiting apprentices, so it is crucial that businesses within the industry are up to date with the latest changes and how it affects their business.
The introduction of the government’s auto enrolment (AE) legislation, which is currently being phased in for employers, places new obligations on smaller manufacturers and engineering companies. Business owners need to be aware of and prepared adequately for AE - staging dates and worker categories need to be understood to ensure compliance and avoid fines.
We’re here to help
Our services spanning the manufacturing and engineering sector range from audit/assurance and tax returns, to payroll and financial management.
For more information, please contact firstname.lastname@example.org.