This week we welcome our guest blogger, Helen Fowler, who produced the below article after interviewing Ant Young, CEO of IQBlade Limited.
Helen worked for the national press as a business correspondent for some years before becoming editor of a monthly business magazine in London. Now based in Edinburgh, she has a financial qualification (the Investment Management Certificate) which she says helps her when it comes to writing material for us. Visit her website to find out more.
Liverpool accountant Jonathan Ford & Co is saving one of its clients as much as a third off its tax bills. It’s doing so by helping data management firm IQBlade access a government scheme aimed at encouraging research and development (R&D) more broadly across the UK.
IQBlade is a tech business based in the same city as Jonathan Ford & Co. It was set up two years ago with backing from the government’s Northern Powerhouse Investment Fund. With help from Jonathan Ford & Co, the firm is enjoying substantial tax credits, giving it the further resources it needs to continue refining its market intelligence and data management software.
“Without the rebates, we wouldn’t be where we are today,” says Antony Young, director and co-founder of IQBlade.
Much of IQBlade’s work involves pioneering new types of data, with the advantage that many of its activities can as a result be offset against tax. “We are still researching and developing the types of data that we can install into the IQBlade platform,” says Young. “Over the next few months we’ll be developing several new functions to help make our platform even more useful.”
Jonathan Ford & Co has made it possible for IQBlade to claim back a percentage of the salaries paid to its developers and data scientists against tax, says Young. “We can also attribute a percentage of management time for when we’re involved in the fact-finding and design process.”
Sums involved in the rebates can be significant, ranging from 18% to 34% of R&D spend. “Because we are a tech start-up, the vast majority of what we do is still R&D,” says Young. So last year the firm received almost £70,000 back from the government through tax rebates after Jonathan Ford & Co handled all the necessary paperwork. Says Young: “Jonathan Ford & Co has been really great.”
Tax rebates on R&D investment like those helping IQBlade are part of the government’s attempts to encourage science and technology enterprises. To qualify a firm must be able to show it’s looked for a scientific or technological advance. It must also prove it’s had to overcome uncertainty in the process. The project can involve something new, or it might involve improving an existing system.
Using seamless cloud software, Jonathan Ford & Co and its client can communicate easily with each other. Young says he’s been impressed by the accountancy firm: “After talking it over with John Mansley [director, and the firm’s R&D specialist] for an hour, it really is simple.”
By introducing a cloud accounting system (Xero), the firm no longer needs to have an accountant of its own on staff, saving it something between £25k and £50k a year.
The government introduced the tax incentives back in 2000 for small- and medium-sized enterprises, launching a separate scheme for larger companies a couple of years later. The tax breaks are part of an initiative to move start-up firms into the United Kingdom more broadly. Almost any company carrying out research is likely to qualify, says Jonathan Ford & Co.
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