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Aug 09
0

Tax Advice : Ross Boyd advises summer childcare Tax advice to help budgets

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Belfast Tax Advice August 2022

With summer holidays fast approaching and inflation at a 40-year high, Ross Boyd, Director at consultancy, RB+ Chartered Accountants, is advising parents across Northern Ireland to take advantage of tax-free childcare breaks this summer, through Belfast tax advice from his city centre accountancy firm.

Ross says, “As inflation soars, household budgets across the country are coming under intense pressure. We are all feeling the pinch, with the recent hike in National Insurance, the increase in VAT in the hospitality sector and other tax generating initiatives, as we seek to entertain our children this summer.

“However, many may be unaware that through appropriate Belfast tax advice there are tax-free breaks available to parents.

The government’s Tax-Free Childcare scheme offers working families, including those who are self-employed, support towards childcare costs for kids of 11 years old or younger.”

“Tax-free childcare is available for children aged up to 11, or 17 if they have additional needs. For every £8 you pay in, the government adds £2 up to a maximum of £500 every three months, or £1,000 if your child has complex needs. There are also income limits that need to be considered if you earn more than £100,000 or below the National Living Wage.”

There are various eligibility requirements for the scheme, including employment status, income, your child’s age, your circumstances, and your immigration status

Ross continues, “Parents should also be aware that Tax-Free Childcare accounts aren’t only for regular childcare costs. They can also be used to pay for after-school or summer childcare expenses, such as accredited holiday clubs, childminders or sports activities.

“If you are a business owner then Tax-Free Childcare is great news for you as an employer as well as a parent. The scheme can help keep you fully staffed during school breaks, as it helps employees to pay for childcare during work hours.”

A Tax-Free Childcare account can also function as a nest egg, allowing parents to save for times when care is needed most, and money may be short.

Ross adds, “You can pay money into your Tax-Free Childcare account whenever you like. This allows you to pay more during some months, and less at other times, building up a balance to use over the summer holidays, for example, when you’ll need more childcare. You could also ask grandparents and other family members to pay in in lieu of birthday presents.”

To find out more about the Tax-Free Childcare scheme, go to: https://www.gov.uk/tax-free-childcare

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Jul 07
0

Accountants in Belfast NIC Reaction : What the new threshold means for Northern Ireland

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Accountants in Belfast explain : On 6th July 2022, employees in Northern Ireland can now earn more money before they start paying National Insurance contributions as the tax threshold has increased.

Belfast Accountants React to July 2022 National Insurance Contribution Increase

Employees can now earn £12,570 a year before paying National Insurance. This figure is up £2,960 from last year’s value of £9,880. This is great news for workers earning less than about £34,000, as this change will more than offset the earlier 1.25p NI increase that came into effect in April 2022.

Hopefully this move will help ease the cost-of-living crisis for those struggling with bills and rising costs. The chancellor has said seven in 10 workers who pay national insurance contributions (NICs) will pay less.

How much will my salary increase in Northern Ireland?

BBC News claims that an employee earning £20,000 a year will pay around £178 less National Insurance in 2022-23 than they did the previous tax year.

The team RB Chartered Accountants in Belfast explain that it’s a straightforward process to ascertain how this change will affect your take home pay. If you enter your annual salary in this online tool on the government’s website, you will see your estimated tax savings.

As Chartered Accountants in Belfast, we would urge business owners to use this increase as a positive news story and to alert their staff members of the upcoming changes, as this may have a direct impact on their monthly wage packet.

It is evident that businesses are facing financial challenges right across the board. With the recent news of inflation passing 9% in May 2022, it is important that business owners take time out to carefully consider how to respond to these challenges as this will undoubtedly have a direct impact on the health of our economy.

How does this affect self-employed people?

RB Chartered Accountants in Belfast explain that these changes could allows self-employed people to keep more of their hard-earned income before NI is automatically deducted. These changes combined with other recent tax updates mean that the savings to some business owners could be significant if they update policies and seek professional advice.

However, with everyday prices such as food and fuel rising sharply, some households may not feel better off in practice, even with more money in their pay packet. Entrepreneurs and self-employed people must update the way that they pay themselves to take advantage of the change, this won’t happen automatically. Currently, the most tax-efficient way for directors working through a limited company to maximise their earnings is through a blend of salary and dividends, and this NI change means the blend should be updated to reflect the greater threshold and tax-free allowance.

As Chartered Accountants in Belfast, what is our advice?

Now is the time for businesses to introduce measures to help mitigate the impact of these changes. At RB Chartered Accountants, we can advise on a wide range of measures to assist both yourself and your business. Contact a member of our team today to discuss more about how we can help you create these efficiencies through a no-obligations chat.

Jun 28
0

Leading Belfast Accountants explain – Owner-managed businesses can increase wealth in tough economic times

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Belfast Accountants Recession Advice

As Belfast accountants we can see that SERVICE businesses across Northern Ireland are navigating a uniquely challenging economic climate. With inflation at a 40-year high, increasing taxation, the recent cessation of the reduced rate of VAT for hospitality and a shortage of talent, our base of owner-managed service businesses is facing an uphill battle when it comes to expansion and wealth enhancement.

High inflation impacts significantly upon owner managed businesses, with an inevitable decrease in consumer demand, increased costs and supply pressures. Currently, this is compounded by increasing taxation and an unclear future tax landscape, which makes it difficult for businesses to plan their investment strategy.

Service businesses have been hit particularly hard, not only by the rising cost of living, but also by increasing taxation for employers. The cessation of the reduction of VAT for hospitality, which ended on April 1 has also been a real challenge. The subsequent return of the 20 per cent rate of VAT for hospitality businesses has seen the price of services increase and costs passed onto the customer.

Local businesses are also facing a labour shortage as they compete with global brands for staff. Although they may offer excellent opportunities,

The most important differentiator is actually innovation. Businesses would benefit from exploring research and development, which includes the creation of new processes and products, and making improvements to, or even reimagining existing ones. R&D tax credit is available to business owners across Northern Ireland and can result in a corporation tax saving.

In order to maintain growth momentum and increase their wealth, businesses should also explore restructuring. This can be effective way to respond to changes in the market, and to sustain economically sound business operations in the face of decreasing consumer demand.

To do this, organisations should begin by setting clear business objectives and evaluating sales against forecasts. They should then create a new business strategy and look at restructuring management and designing a new organisational structure. Businesses should also consider growth through acquisition, along with remote working, which can drastically reduce overheads.

Small businesses with lesser brand recognition have to work harder to attract the best talent.

As Belfast accountants, It is our opinion that service businesses can survive and thrive in this difficult climate by differentiating themselves. Contrary to popular belief, price point isn’t the most important factor here. Rather, businesses should specialise in a niche area and ensure that they are geared to offer quality bespoke, modern and informal services to the market.

With the fourth industrial revolution upon us, I believe that businesses must also anticipate future trends and embrace new technologies.

An agile approach is a vital ingredient for success in today’s market and initiatives like the recently introduced Making Tax Digital (MTD) for VAT regulation can really help businesses to streamline important processes, monitor the health of their business on an ongoing basis, and gather intelligence on competitor pricing. All of this will help to ensure that their business structure is efficient and that profits are maximised.

Published article link : https://www.irishnews.com/business/2022/06/28/news/owner-managed-businesses-can-increase-wealth-in-tough-economic-times-2753874/

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Jun 28
0

RB Accountants Belfast, Northern Ireland – If UK move to 25% corporation tax ‘it will lure even more investors to the Republic’

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accountants in Belfast

Northern Ireland risks losing out more than ever to the Republic from next year when corporation tax becomes double that of our neighbour, it has been claimed by accountants in Belfast.

The Republic’s historic low-tax policy of charging just 12.5% has helped lure huge companies like TikTok, Google, Apple and Facebook to set up over the border.

Northern Ireland has lost out as a result and discussions over lowering our corporation tax have not resulted in action.

From April next year, the main rate of corporation tax in the UK will increase from 19% to 25%. The EU and OECD have looked at changing rules so that a minimum rate of 15% would apply.

The UK’s move to a 25% rate will make Northern Ireland a less attractive spot when compared to the Republic.

In addition, the Republic retained its full membership of the EU, which is another selling point. However, Northern Ireland remains within the single market for goods, under the terms of the Protocol.

Accountants in Belfast explain there are lost opportunities for investment which could hinder economic growth.

According to the Department for International Trade, foreign direct investment projects here created 2,351 new jobs in 2019-20.

Factors in the Republic such as higher income tax could work against it. The cost of living is also much higher over the border.

This is something that will have to be assessed on a case-by-case basis, but a corporation tax rate that is half that of Northern Ireland’s may ultimately encourage investors to gravitate towards the Republic.”

Businesses in Northern Ireland need to begin preparations for the new tax regime as soon as possible.

My advice to local businesses would be to reassess your business structure both within the UK and EU to ensure that you get the best rates available

Updated structures may be quite different and you will need to implement a quality business plan and use good financial management to get the most from these changes.

With soaring inflation and a new era of supply chain insecurity, businesses need to plan more carefully than ever.

Read our full article as accountants in Belfast here : https://www.belfasttelegraph.co.uk/business/northern-ireland/uk-move-to-25-corporation-tax-will-lure-even-more-investors-to-the-republic-41585743.html or find our latest posts by viewing our news section http://rossboyd.co.uk/category/news/

Apr 13
0

Ross Boyd Warns Businesses Face Challenging Tax Landscape

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Consultancy, RB+ Chartered Accountants, advises that Northern Ireland’s owner-managed businesses should be alert to challenges as we enter into the 22/23 UK Tax Year.

Following the Chancellor’s spring statement last month, Ross Boyd, Director at the firm, counsels that incoming changes such as the cessation of the reduced rate of VAT for the hospitality sector, bodes for a difficult year ahead.

Businesses will face a high tax burden due to various tax generating initiatives.

Ross Boyd

Ross explains, “Businesses are under more financial pressure than ever as inflation hits a 30 year high and is projected to rise to close to 9 per cent by the end of this year. It’s clear that the chancellor remains committed to progressing tax generating initiatives, which will impact directly on local businesses.”

The increase in National Insurance took effect on 6th April and Ross warns of its direct impact on business owners, especially for high performance businesses.

He continues, “These challenges are compounded by the impact of the recent National Insurance increase, which will be felt most keenly by those earning over £35,000 – a salary bracket that includes many of NI’s business owners and growth areas of the economy

“Although the chancellor has made an attempt to mitigate the hike by increasing the National Insurance threshold by £3,000 from July to bring it in line with Income Tax Personal allowances, this still represents a significant challenge for our business owners who will need to examine how they can cut back to sustain revenue and profits. They may, for example, need to examine cash flow forecasts and begin monitoring staffing costs or structures.”

Ross also points out that businesses within the hospitality sector will be impacted by the cessation of the reduced rate of VAT for the hospitality sector, which ended on 1st April. The VAT rate for most goods and services within the hospitality industry has since increased from 12.5 per cent to 20 per cent

He says, “With the reduced rate for VAT having ended this month, the hospitality sector is under particular duress at the moment. These businesses are still recovering from the pandemic and the return of VAT to pre-pandemic levels could restrict growth and investment and curtail recovery. Increases to minimum wages further this pressure on the sector.

It is also important that employees begin the new tax year on the right foot by ensuring that they are on the correct tax code. It is each individual’s responsibility to make sure that their tax code is correct, to avoid a monthly tax deduction that may be too high, or an amount owing by the organisation at the end of the year

Ross says, “It’s critical to get your tax code right. If you get it wrong, you might end up underpaying, or overpaying, on your taxes which could lead to a tax investigation from HMRC. There are lots of things that can be done to reduce your effective rate of tax.”

Ross also notes that, whilst the incoming increase in Corporation Tax is scheduled for 2023, it is never to early for businesses to begin preparing

He says, “Whilst a year may seem like a long time, I would advise businesses to begin planning now to mitigate the impact of the 25 per cent Corporation Tax increase, which will inevitably impact upon organisations’ after-tax profits. This is a massive change for small businesses and ends the benefits of a limited company model for many.

“At RB+ Chartered Accountants, we have over twelve years’ experience advising owner managed businesses across Northern Ireland and are committed to supporting our clients’ growth and maximising their wealth. We would encourage any business navigating this challenging tax landscape to seek expert advice as soon as possible.”

Mar 31
0

April 2022 – National Living Wage & National Minimum Wage Increase

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Many workers will get a boost in their salary from tomorrow, 1 April, due to the announced increases in the National Living Wage and National Minimum Wage.

The National Minimum Wage (NMW) is the minimum amount that workers are to be paid.  Workers are classed as anyone of at least school-leaving age, this is then changed to the National Living Wage (NLW) when the worker reaches the age of 23.

These hourly rates have increased as follows:

AgeCategoryFrom 1 April 2022Previous rateIncrease
23+NLW£9.50£8.916.6%
21-22NMW£9.18£8.369.8%
18-20NMW£6.83£6.564.1%
Under 18NMW£4.81£4.624.1%
ApprenticesNMW£4.81£4.3011.9%

Whilst this is good news for employees, this may be a significant increase to the burden employers have to face when combined with the National Insurance increases planned and the increases across the board due to the current rates of inflation.

To ensure these rates are adhered to, HMRC now has an enforcement budget for NMW of over £27m and uses approximately 450 inspectors across 30 locations. 

Since 2015, the budget for minimum wage enforcement has doubled with the government having ordered employers to repay over £100 million to 1 million workers.”

Consequently, it is ever more important that employers get this right to avoid unnecessary visits and potential penalties from HMRC.

In our experience, HMRC’s NMW enforcement team commonly check and challenge employers in the following areas:

  • Requesting workers to wear specific unbranded clothing to carry out employment duties, for example, black trousers, white shirt, black shoes in a restaurant. If the cost is not reimbursing to the worker, HMRC will reduce the rate of pay by an agreed sum.  This could push the employee’s deemed salary to below the NMW/NLW without realising.
  • Any deductions or payments taken from a worker, not passed onto a third party, for example, purchase of products/services including clothing and uniform, security deposits, tool bonds or canteen deductions will also have an impact on the hourly rate calculation
  • Another impact on the calculation of NMW/NLW is the operation of salary sacrifice arrangements.  If your employee requests for example pensions, childcare vouchers, cycle to work or additional holiday purchase to be deducted from their salary this could have consequences for the employer.  Reductions to gross pay also reduce pay for NMW calculations, even if the employee agrees to the deduction voluntarily.

Additionally, deductions or payments taken from a worker when they leave employment, for example, reimbursement of training costs, car hire costs or cycle to work hire costs will also have an impact.

Other areas which HMRC consider to be adjusting items on the NMW/NLW calculation would be:

  • Payments to volunteers/interns.  If a charity has volunteers, they do not need to be paid for their time, however, all out-of-pocket expenses should be covered.  Interns are treated differently; a number of legal cases seem to say that an intern who does work that would be paid if done by an employee or contractor can be a ‘worker’ for the purposes of national minimum wage (NMW) law.  If they are a ‘worker’, you must pay them at least the relevant NMW for their age, even if they are prepared to work for nothing.
  • It is important to pay apprentices for all time worked, including study time.
  • Operation of time off in lieu & additional leave policies could bring an employee under the NMW/NLW depending on whether they are hourly paid or salaried.
  • If there are transactions costs taken from a worker, for example a direct earnings attachment. it is important to consider the protected earnings of an employee and not leave them with less than 60% of their net earnings.
  • Rounding up payroll systems for example, to nearest minute, rounding for early starters/early finish, rounding for late starters, employers must ensure all working time is reviewed and considered, then paid at NMW/NLW or higher.
  • Deduction or payment taken from a worker in respect of living accommodation costs if the payment is to a qualifying local housing authority or registered social landlord.

For any businesses that may be impacted by these increases or want to check that they are fully compliant with legislation, RB+ can advise on a wide range of measures to assist you.  This may include advising on tax efficiencies, business restructuring or audit services. Contact us for a free consultation.

Mar 18
0

RB+ Are Ready For Making Tax Digital (MTD), Are You?

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What Is Making Tax Digital (MTD)?

Making Tax Digital (MTD) is a key part of the government’s plans to make it easier for individuals and businesses to get their tax correct and keep on top of their affairs

The first phase of Making Tax Digital happened in April 2019, when VAT registered businesses with turnover greater than £85,000 had to submit VAT returns digitally.

From 1 April 2022, all VAT registered businesses will have to submit their VAT returns via an approved software platform.

How Will This Affect Your Business?

You will no longer able to keep manual VAT records and submit your VAT return by inputting data into the government gateway. Instead, HMRC will only accept VAT returns sent using software that supports Making Tax Digital for VAT.

The first VAT returns to be affected will be month ended 30 April 2022 (monthly VAT returns) or quarter ended 30 June 2022 (quarterly VAT returns).

There may be a some set up time required but done worry, once you’re up and running, it will be easier to submit VAT returns using online MTD software.

The Advantages Of Making Tax Digital

The advantages of Making Tax Digital include,

  1. The new software will save you time as there will be less paperwork.
  2. Access to management information at the touch of a button.
  3. Real time, up-to-date information with fewer errors.
  4. Reduced stress when it comes to submitting tax returns.

At RB+ we specialise in the latest digital software and solutions. We can work with you and your business to ensure you are ready for the switch. Our certified advisors offer all the necessary training and support you may need in preparation for the next stage of MTD.

Do I Have To Sign Up & What Are The Exemptions?

You can claim an exemption if it is not practical for you to keep records digitally due to location, religious reasons or a disability. You must apply to HMRC for an exemption.

If you fail to submit under the Making Tax Digital requirements, the penalty could be £400

HMRC have announced that a new penalty regime will be introduced in January 2023, one for late filing and the other for late payments. 

The RB+ Guide To MTD In 10 Simple Steps

  1. Don’t panic, speak to the team at RB+ if you need some professional advice, we are here to help!
  2. Make sure your current software is compatible with Making Tax Digital (MTD).
  3. If you currently maintain your accounts manually, we will need to work together to get them moved into a digital format.
  4. Prepare for submission by gathering the following details,
  5. Business e-mail address,
  6. Government Gateway ID and password,
  7. VAT registration number,
  8. Your latest VAT return,
  9. National Insurance Number or Company Registration Number,
  10. Unique Taxpayers Reference (UTR) and
  11. Address & Postcode.
  12. Sign up for Making Tax Digital (MTD).
  13. Obtain confirmation of your registration.
  14. Speak to RB+ once you have steps 1 – 6 complete!
  15. Configure the MTD component on your digital system.
  16. Link your software to your government gateway.
  17. Submit your return digitally & save your confirmation

In the last few months, the team at RB+ have conducted in-depth VAT reviews for selected clients in preparation for MTD. VAT is quite complicated for many businesses. Our specialist reviews have resulted, in some cases, significant reclaims from HMRC. Among other things, this could mitigate the likelihood of additional VAT being assessed against you in future, should you be subject to a VAT investigation from HMRC.

When was the last time you had a VAT review? There is no better time to review everything together with the introduction of MTD. Contact the team at RB+ if you have any doubts or queries about accounting for VAT and we can set some time aside together to work through your enquiry together. 

What Does The Future Hold For Making Tax Digital?

Making Tax Digital for VAT is the first stage of the government’s digitalisation plan.  As noted above, HMRC aim is to have all tax filings digitalised.  Self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for MTD for Income Tax from 6 April 2024.  More on this to follow in the next few months.

Mar 11
0

Taxing Times for Crypto

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Ethereum, De-Fi, yield-farming, liquidity mining, non-fungible tokens and Blockchain are just some of the words that have entered the financial lexicon in recent years. Investing and trading in cryptocurrency and other cryptoassets has become increasingly popular, however, the tax implications of these activities are often poorly understood.

HMRC has been taking an increased interest in cryptoassets, particularly in the past year where it has updated its guidance manuals and issued thousands of ‘nudge letters’, encouraging those suspected of undertaking crypto transactions to ensure all tax is paid. Therefore, it is important to be aware of your tax obligations for your crypto activities and to seek professional advice where necessary.

There is currently no specific UK crypto tax legislation. Therefore, profits are taxed in different ways depending on the circumstances and actions of the taxpayer, and Income Tax, Capital Gains Tax and/or Inheritance tax may apply:

Capital gains tax

Many people hold cryptoassets as personal investments, typically for capital appreciation or to make specific purchases. Buying and selling of cryptoassets by an individual is usually classed as investment activity (dependent on the frequency and amounts involved). In these circumstances, an individual will usually have to pay Capital Gains Tax, where gains are realised.

It is a mistake to believe that only when you sell a cryptoasset for money, that this is when it becomes a gain and therefore liable for capital gains tax. A gain can also arise when cryptoassets are exchanged (e.g. from Bitcoin to Ethereum), or when cryptoassets are used to pay for goods and services.

The calculation of gains can become complicated, particularly if other assets have been ‘disposed of’ during the same tax year.

Income Tax

Income tax and national insurance become liable on the value of the cryptoasset asset when certain criteria are met. This includes circumstances in which the frequency and nature of transactions are deemed to constitute a trading activity. Other instances include remuneration from employers, mining, and specific types of airdrops.

Inheritance tax

Cryptoassets are in the same asset class as property for inheritance tax purposes and are therefore subject to inheritance tax rules.

How RB+ can help

Given the complexity involved in properly accounting for transactions in cryptoassets, it is important that professional advice is sought to enable you to report correctly and ensure the proper amount of tax is paid. Additionally, effective tax planning should be undertaken to ensure your tax affairs are in order.

If you are seeking advice about your cryptoassets, feel free to contact any of our team for a no-obligations chat. Email Hello@rossboyd.co.uk

Feb 28
0

MICHELLE PRENTICE STRENGTHENS TAX ADVISORY AT RB+ BELFAST

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RB+ in Belfast is delighted to announce the appointment of Michelle Prentice. Michelle joins the team as Senior Tax Manager and will draw from her 18 years’ experience working with some of the biggest firms and businesses across Belfast and Northern Ireland. Prior to joining RB+ Belfast, Michelle held the position of Tax Director at a medium-sized Belfast firm, where she managed numerous departments including Corporation Tax, Personal Tax and Payroll.

Michelle’s expertise encompasses everything from your basic tax preparatory work to complex tax advice and reorganisations on multinational companies. Michelle has carefully implemented tax strategies for a broad range of clients across multiple industries to coordinate their affairs to effectively reduce tax and manage payments.

Michelle specialises in intricate tax projects and regularly assists clients with the implementation of share schemes to support companies secure investors, remunerate employees efficiently and enable shareholders, a tax efficient exit from their business.

Michelle has a keen eye for detail and regularly offers advice on the latest updates, compliance, ruling and regulations that should be considered when planning and preparing for the year ahead.

In Michelle’s new role she will oversee and lead all aspects of the firms’ tax advisory and planning activity.

Michelle Prentice comments,

“I am delighted to bring my experience to the Senior Management team at RB+ Belfast. It’s great to become part of an exciting growing Chartered Accountants team who offer a top-quality advisory service. I have been passionate about the importance of tax planning my whole career and I can’t wait to get started. This brand-new advisory role allows me to be completely flexible in my approach, I plan to spend significant time with each client to add value and offer business specific clear-cut tax advice. My experience puts me in a unique position at the firm and I can’t wait to strengthen the RB+ tax offering with my strategic and well-informed approach.”

Ross Boyd comments,

“After an extremely busy 2021, it was important for us to strengthen our management team with an experienced tax hire. The needs of our clients are constantly evolving and Michelle’s expertise in all aspects of tax, particularly when it comes to tax planning ensures that we are skilled, prepared and ready for the next stage of growth. At RB+ we strive to add value and we are pride ourselves on being able to offer the best advisory to our wide range of clients. Michelle’s knowledge and skill set will enable us to add true value and will help our clients secure financial benefits through UK tax incentives, across a range of areas including Inheritance Tax planning, Capital Allowances reviews, Employee Share Schemes and R&D Tax credits.”