The Safety Net...
With Annette Bunn
Dear Nettie @#The SafetyNet
I have been working as a sole trader ‘designer of products’ for some time and have now started selling some of them. These are my own ‘inventions’ and I have worked hard to produce them and they are now potentially being sold via a couple of retail outlets as well as me making my own sales online via my website.
My frustration lies in the amount of tax I am now looking to pay after making no profit for such a long time, and investing so much money into this. Is there any help available?
I have had the same accountant for years and she tells me I have done everything correctly – have I missed something? I feel rather frustrated by it all.
Not really sure if you can help me, but a second opinion is always good to have. Jim
Thank you for making contact and well done on producing something I assume is new to the market and getting sales.
I don’t think what I am about to say to likely to relieve your feelings of frustration.
I appreciate that you have been working with your accountant for a number of years, and I am sure your accounts have been completed correctly, however what may be lacking here is a serious conversation with your accountant about what you are actually doing.
There is help available if you have created something which is new to the market through research and development which has taken time and money to complete, please take a look at the following website www.riftresearch.com for further details and to see if you believe your product may have been eligible.
HOWEVER when you read this through you will see that the problem here is actually that even if the product you have created is eligible you will not be able to claim as you would need to have been a limited company not a sole trader, as the benefit is connected to corporation tax.
Even more frustrating is that this is potentially an annual claim and it can be claimed even if you are not making a profit.
Government figures suggest that around 90% of potential claims are not made as either the potential client or the accountant working with them does not identify this.
Can I suggest that you take a look at the website above to see if you think your product would be eligible and let me know, and I will happily get one of the team to phone you, and then we can put in place some ‘next steps’ if appropriate to set up a limited company.
With regards to your tax bill I appreciate your frustration, but apart from offering to look it over, I would suggest you would be best to pay it.
Hope this is all of help and to hear from you shortly