Connect with us

Finance

Adding Revenue through R&D Tax Relief Service

Published

on

by Mike Dean, Managing Director, WhisperClaims

 

In a commodity compliance market, accountants need to generate new revenue streams – but they also need to build the strong relationships that are key to long-term client retention. Mike Dean, Managing Director, explains why it is a perfect time for accountants to leverage their trusted advisor status and productise an array of services, including R&D Tax Relief, to add value and get ever closer to clients.

Expanding Revenue

With traditional accountancy services rapidly reaching commodity status, price pressure continues to increase. Enjoying ever-decreasing profit margins in book-keeping and accounts preparation, accountants are exploring a raft of options in a bid to add revenue. Adding new customers to the mix is both an expensive process and, given the competition, a race to the bottom in a commoditised market. To create a more profitable business model, growing numbers of accountants are tapping into new areas of service provision that can leverage the existing client base.

What services will be the most valuable – to both clients and the business? How can a firm build the right expertise, entice existing clients to embrace new service options and, critically, create a service that can be delivered at a price point that is both profitable and compelling?

While firms have been exploring areas such as pensions and investment advice, one of the biggest areas of opportunity – and one that delivers considerable value to clients – is R&D Tax Relief. While this may come as a surprise to accountants who have avoided this area due to perceptions of complexity, several factors are combining to make this the perfect time for a rethink.

R&D Support

One of the most positive changes is that HMRC’s current focus on improving R&D Tax Relief compliance is reframing the way companies and advisors approach this area – and, finally, putting paid to the ‘black magic’ nonsense propagated by dedicated R&D consultants over the years. Yes, there are 500 pages of guidance from HMRC which can appear daunting – but the information is perfectly accessible for qualified accountants with a firm grip on tax legislation.

Secondly, technology, advice and education are now in place to support accountants every step of the way; from learning the scheme, to the process of discussing science and innovation with clients, and completing the R&D Tax Relief claim. Accountants can now build on their existing client knowledge and trusted advisor status to rapidly create a new service line that is both profitable and reinforces the client relationship.

Finally – and most important – is the value of the claims. With one R&D Tax Relief platform reporting an average claim size of £130,000 of eligible spend, equating to around £30,000 of tax relief, this is a service that delivers more quantifiable value to clients than anything else accountants are offering right now.

Getting Started

Once accountants have embraced the concept of R&D, it doesn’t take long to create a profitable service model. As professional advisors, accountants already have an in-depth knowledge of client activities, which makes it far easier to identify those clients most likely to qualify. This process can be accelerated by using an independent Portfolio Review service which assesses client information and highlights those most likely to qualify for R&D tax relief.

At this point, accountants can then embark on a conversation with clients about their use of science and technology to achieve innovation. At every stage, the process can be supported by R&D tax relief technology, to help accountants frame the conversation – and if difficulties arise, a helpline can provide extra insight. Furthermore, with a dedicated R&D tax relief solution, accountants can create a repeatable process. This not only means more claims can be completed – but also introduces the chance to build a fixed fee model – an approach far more compelling than the contingent claim fee percentage charged by dedicated R&D tax consultants.

Deep Relationships

Of course, some accountants have been making a small fee on R&D tax relief over the years by referring clients to third-party providers, but why let another organisation into a client’s business?

It is not that complex and, more importantly, the process of talking to clients about the potential for R&D tax relief is a great opportunity to discuss the business, a process that often raises new service opportunities. From cash flow advice to loan and grant applications, even if a client doesn’t qualify for R&D tax relief, both accountants and clients will gain value from the process.

At a time when technology has not only commoditised compliance but also created distance between accountants and clients, adding R&D tax relief services to the portfolio not only unlocks a potential new revenue stream but also underlines the value of the accountant as a trusted advisor. It ensures the accountant retains control over every aspect of the client relationship and creates a new level of engagement that will ensure clients understand that a high-quality accountant provides far more than commodity compliance services.

Finance

Mini-Budget 2022:

Published

on

By

Tax giveaway is a boost for business, but will it drive growth or fuel inflation?

 

Chancellor Kwasi Kwarteng has announced a comprehensive wave of tax cuts and other incentives for individuals and businesses, as well as confirming some of the announcements made earlier this week.  The measures are part of a new Growth Plan, which is aiming to boost economic growth. However, only time will tell if they will curb inflation and temper recession concerns.

Richard Godmon, tax partner at accountancy firm, Menzies LLP, said:

“With another fiscal statement to follow, this mini-Budget is a defining moment for the new Government and tax cuts are firmly back on the agenda.

“The biggest surprise was the decision to simplify Income Tax by moving to a single higher rate of tax for high earners of 40%, with effect from April next year. This will encourage a spirit of entrepreneurialism by incentivising work and putting money back into the economy. The flip side is that the Government might also be hoping that the move increases the tax take, as it could help to draw people back to the UK who may have previously chosen to live and work elsewhere, while encouraging others to stay put.

“The reduction in dividend tax rates and the abolition of the additional rate of tax from April 2023 means that business owners will need to consider carefully the timing of dividend payments over the next few months.”

Up to 40 new Investment Zones

The Chancellor also outlined plans to create up to 40 new ‘investment zones’ in England, with the potential for more in Wales, Scotland and Northern Ireland. Businesses in these zones will benefit from wide-ranging tax breaks including 100% tax relief on investments in plant and machinery, and no National Insurance Contributions will be payable on the first £50,000 earned by new employees.

Richard Godmon, tax partner at Menzies LLP, said: “The new Investment Zones are reminiscent of the former Enterprise Zones, but they will provide a much more favourable tax environment for businesses and they promise to become a magnet for inward investment. There are currently 38 areas in England on the list for consideration and we look forward to finding out which ones will be selected.”

Incentivising business investment and Corporation Tax rise ‘cancelled’

The limit of the Annual Investment Allowance (AIA) will not revert to £200,000 as planned in April next year, it will now permanently stay at £1 million.

Richard Godmon, tax partner at Menzies LLP, said:

“Capital allowances are highly valued by businesses and they will be pleased that this one in particularly is going to stick at £1 million and that this is no longer being described as a temporary measure, but is to be made permanent.

“The decision to cancel the planned increase in Corporation Tax (due to tax effect next April) will be a relief to many small and medium-sized businesses who have been concerned that this increase would erode profits further and make it even more challenging to remain viable.”

Incentivising entrepreneurial investment

The Chancellor highlighted plans to increase the cap on investments that can be made under the Seed Enterprise Investment Scheme (SEIS) from £150,000 to £250,000. Individuals making investments in start-ups up have had the limit doubled to £200,000, with the 50% income tax relief remining the same. The Government also gave its commitment to continuing to back the Enterprise Investment Scheme (EIS).

“These announcements send a signal to entrepreneurial investors that tax should not be a barrier and the Chancellor wants to expand incentives in this area,” added Richard Godmon, tax partner at Menzies LLP.

Stamp Duty Land Tax

The threshold at which Stamp Duty Land Tax (SDLT) becomes payable on residential property purchases in the UK has been raised to £250,000, double its previous level in a bid to boost the property market. In addition, first-time buyers will not have to pay SDLT on property purchases up to a value of £425,000 (up from £300,000). Both measures will take effect from today.

Richard Godmon, tax partner at Menzies LLP, said:

“The decision to raise the SDLT threshold is designed to build consumer confidence and boost the housing market generally. For property developers it will fuel activity by creating demand, particularly from first-time buyers, and help to free up finance to front-end development projects.”

IR35 Changes

Richard Godmon, tax partner at Menzies LLP, said:

“The repealing of the 2017 and 2021 IR35 changes will be hugely welcomed as it will remove an administrative burden, risk and cost, enabling businesses to devote resources to furthering their growth strategies.

“It is important to recognise that IR35 has not been abolished and the result of the changes is that the risk and compliance costs are being returned to the individuals and their personal service companies.  HMRC will no doubt redirect their focus towards the contractors, which will bring challenges and make enforcement more difficult.”

Continue Reading

Finance

A zero trust environment is critical for financial services

Published

on

By

Boris Bialek, Managing Director of Industry Solutions at MongoDB

Not long ago security professionals were still focused on protecting their IT in a similar formation to mediaeval guards protecting a walled city – concentrating on making it as difficult as possible to get inside. Once past this perimeter though, access to what was within was endless. For financial services, this means access to everything from personal identifiable information (PII) including credit card numbers, names, social security information and more ‘marketable data’. Unfortunately, we have many examples of how this type of security doesn’t work, the castle gets stormed and the data isn’t protected. The most famous is still the Equifax incident, where a small breach has led to years of unhappy customers.

Thankfully the mindset has shifted spurred on by the proliferation of networks and applications across geographies, devices and cloud platforms. This has made the classic point to point security obsolete. The perimeter has changed, it is fluid, so reliance on a wall for protection also has to change.

Zero trust presents a new paradigm for cybersecurity. In this context, it is already assumed that the perimeter is breached,no users are trusted, and trust cannot be gained simply by physical or network location. Every user, device and connection must be continually verified and audited.

What might seem obvious, but begs repeating, with the amount of confidential customer and client data that financial institutions hold – not to mention the regulations – this should be an even bigger priority. The perceived value of this data also makes financial services organisations a primary target for data breaches.

But how do you create a zero trust environment?

Boris Bialek

Keeping the data secure 

While ensuring that access to banking apps and online services is vital, it is actually the database that is the backend of these applications that is a key part of creating a zero trust environment. The database contains so much of an organisation’s sensitive, and regulated, information, as well as data that may not be sensitive but is critical to keeping the organisation running. This is why it is imperative that a database is ready and able to work in a zero trust environment.

As more databases are becoming cloud based services, a big part of this is ensuring that the database is secure by default, meaning it is secure out of the box. This takes some of the responsibility for security out of the hands of administrators because the highest levels of security are in place from the start, without requiring attention from users or administrators. To allow access, users and administrators must proactively make changes – nothing is automatically granted.

As more financial institutions embrace the cloud, this can get more complicated. The  security responsibilities are divided between the clients’ own organisation, the cloud providers and the vendors of the cloud services being used. This is known as the shared responsibility model. This moves away from the classic model where IT owns hardening the servers and security, then needs to harden the software on top – say the version of the database software – and then needs to harden the actual application code. In this model, the hardware (CPU, network, storage) are solely in the realm of the cloud provider that provisions these systems. The service provider for a Data-as-a-Service model then delivers the database hardened to the client with a designated endpoint. Only then does the actual client team and their application developers and DevOps team come into play for the actual “solution”.

Security and resilience in the cloud are only possible when everyone is clear on their roles and responsibilities. Shared responsibility recognizes that cloud vendors ensure that their products are secure by default, while still available, but also that organisations take appropriate steps to continue to protect the data they keep in the cloud.

Authenticate Everyone  

In banks and finance organisations, there is always lots of focus on customer authentication, making sure that accessing funds is as secure as possible. But it is also important to make sure that access to the database on the other end is secure. An IT organisation can use any number of methods to allow users to authenticate themselves to a database. Most often that includes a username and password, but given the increased need to maintain the privacy of confidential customer information by financial services organisations this should only be viewed as a base layer.

At the database layer, it is important to have transport layer security and SCRAM authentication which enables traffic from clients to the database to be authenticated and encrypted in transit.

Passwordless authentication is also something that should be considered – not just for customers, but internal teams as well. This can be done in multiple ways with the database, either auto-generated certificates that are needed to access the database or advanced options for organisations already using X.509 certificates and have a certificate management infrastructure.

Tracking is a key component 

As a highly regulated industry, it is also important to monitor your zero trust environment to ensure that it remains in force and exompasses your database. The database should be able to log all actions or have functionality to apply filters to capture only specific events, users or roles.

Role-based auditing lets you log and report activities by specific roles, such as userAdmin or dbAdmin, coupled with any roles inherited by each user, rather than having to extract activity for each individual administrator. This approach makes it easier for organisations to enforce end-to-end operational control and maintain the insight necessary for compliance and reporting.

Next level encryption

With large amounts of valuable data, financial institutions also need to make sure that they are embracing encryption – in flight, at rest and even in use. Securing data with client-side field-level encryption allows you to move to managed services in the cloud with greater confidence. The database only works with encrypted fields and organisations control their own encryption keys, rather than having the database provider manage them. This additional layer of security enforces an even more fine-grained separation of duties between those who use the database and those who administer and manage it.

Also, as more data is being transmitted and stored in the cloud – some of which are highly sensitive workloads – additional technical options to control and limit access to confidential and regulated data is needed. However, this data still needs to be used. So ensuring that in-use data encryption is part of your zero trust solution is vital. This also enables organisations to confidently store sensitive data, meeting compliance requirements, while also enabling different parts of the business to gain access and insights from it.

Securing data is only going to continue to become more important for all organisations, but for those in financial services the stakes can be even higher. Leaving the perimeter mentality to the history books and moving towards zero trust – especially as cloud and as-a-service infrastructure permeates the industry – is the only way to protect such valuable data.

Continue Reading

Magazine

Trending

Business2 days ago

Know Your Business (KYB): Exceeding KYC

Victor Fredung, CEO at Shufti Pro   Money laundering costs the UK more than £100 billion pounds a year, according...

Finance1 week ago

Mini-Budget 2022:

Tax giveaway is a boost for business, but will it drive growth or fuel inflation?   Chancellor Kwasi Kwarteng has...

Finance1 week ago

A zero trust environment is critical for financial services

Boris Bialek, Managing Director of Industry Solutions at MongoDB Not long ago security professionals were still focused on protecting their...

Banking1 week ago

Digital Banking – a hedge against uncertainty?

Ankit Shah, Head of Digital Banking, Apex Group   The story of the 2020’s thus far is one of crisis....

News1 week ago

Union Bank of India goes live with RuPay Credit Card on UPI with Kiya.ai as a technology partner

Nitesh Ranjan, ED Union Bank of India with Rajesh Mirjankar, Managing Director & CEO, Kiya.ai at the launch   Kiya.ai,...

Finance1 week ago

Anyone Can Become an R&D Tax Expert with the Right Foundations

Ian Cashin is a Customer Success Manager at Fintech company and R&D tax software provider WhisperClaims   For accounting firms,...

Business1 week ago

Addressing the ongoing global pilot shortage issue

By Bhanu Choudhrie, Founder of Alpha Aviation   The Covid-19 pandemic brought the aviation industry to a halt, causing vast...

Business1 week ago

How exporters can mitigate risks and operate smoothly in stormy, post-Brexit waters

By Morgan Terigi is Co-Founder and CEO of Incomlend   The past few years have presented a series of hurdles...

Business1 week ago

From employees to customers, workforce management can benefit the entire banking ecosystem

Michael Cupps, SVP of Marketing of ActiveOps explores the significant impact workforce management can have on the employees and customers...

Business1 week ago

Redefining the human touch with digital transformation

Simon Kearsley, CEO of bluQube   It may not be a new phrase, but digital transformation is still inducing anxiety...

Finance2 weeks ago

CFOs – the forgotten ally in the fight against ransomware

Justin Vaughan-Brown, VP Market Insight at Deep Instinct   Ransomware attacks have nearly doubled in the past couple of years....

Technology2 weeks ago

7 cost benefits of cloud accounting software

By Paul Sparkes, Commercial Director of iplicit, an award-winning accounting software developer   Is your accounting software having a laugh...

Business2 weeks ago

How does Identity Access & Privileged Access Management help in PCI DSS Compliance?

Narendra Sahoo is a director of VISTA InfoSec. Introduction The Payment Card Industry Data Security Standard also commonly referred to...

Finance2 weeks ago

Listed private debt deserves a closer look from investors

By Michel Degosciu, Managing Partner, LPX AG Over the past few years, the private debt asset class is attracting serious...

Banking2 weeks ago

Security vs online payment convenience: which one is tipping the scales for customers?

 Chirag Patel, President of Digital Wallets at Paysafe.   While keeping their payment details safe is a top priority for...

Business2 weeks ago

The Tool and Tips to Truly Get Started with No-Code Development

Author: Chris Obdam, CEO of Betty Blocks   Throughout the legal industry, firms and in-house departments are leveraging legal tech...

That’s where Netcall’s Liberty Create came in. Create is a new breed of low-code software solution, built for both business users and professional developers That’s where Netcall’s Liberty Create came in. Create is a new breed of low-code software solution, built for both business users and professional developers
Business2 weeks ago

How ReFi Will Transform Finance

– by Ransu Salovaara, CEO of carbon platform Likvidi   Humanity faces a multitude of threats, many of which are...

Business3 weeks ago

THE NEXT WAVE OF FINTECH IS HERE

Much has been made of the ‘second generation’ fintech movement recently, but what have these businesses learned from those entering...

News3 weeks ago

UK leaves Europe trailing in its embrace of digital banking

People in the UK have embraced digital and online banking in a way that those across the rest of Europe...

Business3 weeks ago

The rise of automation and its impact on the CFO & CIO

By: Gert-Jan Wijman, VP Europe, Middle East and Africa at Celigo   On the back of the pandemic, organisations have...

Trending