Business Transformation - Q4 2023

Business Transformation Q4 2023 | A promotional supplement distributed on behalf of Mediaplanet, which takes sole responsibility for its content

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An exclusive edition of Business Transformation with special features on

Future of Tax | Cyber Security | Future of Work

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Future of Tax What upcoming EU VAT changes will impact the UK? The EU is planning its first major changes to VAT laws since the UK left the common VAT area as part of the Brexit process.

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he new proposals are part of the EU’s VAT in the Digital Age (ViDA) policy reforms, which prepare European companies for the further expansion of ecommerce and trade digitalisation. This will have an effect on UK companies; some of these will be welcome, but others will prove more challenging.

William Bain Head of Trade Policy, British Chambers of Commerce

The ‘deemed supplier’ principle will also be extended, potentially from 2026, into new sectors such as transport and hospitality accommodation — enabled by online platforms.

They will assume liability to levy VAT if the individual suppliers have not.

The EU’s Import One-Stop Shop A major change is the incoming mandatory requirement upon platforms to use the ‘Import One Stop Shop’ (I-OSS) for goods being exported to E-invoicing EU customers. A broader obligation — for will be the non-platform transactions as well — means mandatory means all goods from outside the EU will have to be supplied using I-OSS. The current rules apply of invoicing for only to goods under €150. intra-EU supplies Digital invoicing and online platforms UK exporters of services via remote means or goods and In 2030, under the new Digital Reporting into the EU will be brought within the scope Requirements (DRR), e-invoicing will be the of VAT rules and will have to account for the services. mandatory means of invoicing for intra-EU VAT due on the supply of services. EU laws will supplies or goods and services. It will be up to continue to affect exporting firms in the UK, EU states whether they still accept VAT invoices from Great selling goods and services into their largest export market.

Britain (GB) in paper formats.

Getting the right advice on compliance, with updates in EU Some of the reforms will simplify compliance — for VAT law, remains as important as it ever did. example, registering in one EU state for VAT will be all that is required for a British company rather than having to file in multiple EU states. However, this could be delayed from 2025 until 2026.

Northern Ireland tax reforms It should also be remembered that Northern Ireland (NI) continues to apply EU VAT law on traded goods but not services, and these reforms will have relevance to NI in terms of its trading relationship with the EU. The legislation is due to be adopted in 2024.

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Tax rules update: when services are no longer VAT-exempt and recovered VAT on development and startup costs could end up having to pay that back to HMRC.

Paid for by haysmacintyre

‘Always Speaking’ principle cases UK VAT law applies the so-called ‘Always Speaking’ principle. This reflects on the scenario when the legislation was written, but if a new situation emerges (as with ongoing technical innovation), courts have to consider whether it falls within the original intention of Parliament.

However, the principle was denied in a recent court case. A cinema argued that broadcasting a live performance of a national theatre production in the cinema should qualify for VAT exemption and be treated the same as a live production. “The court denied that on the basis that there was not any interaction between the performers and audience, so it could not be a live performance,” says Todd.

Organisations that may have charged and recovered VAT on development and startup costs could end up having to pay that back to HMRC. Businesses that have switched to technology to deliver services are being warned about how VAT legislation rules could impact changes to their operating formats.

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INTERVIEW WITH Dougie Todd VAT Partner, haysmacintyre

INTERVIEW WITH Jon Dawson Partner, Head of Creative, Media & Technology, haysmacintyre

WRITTEN BY Mark Nicholls

on Dawson, Partner and Head of Creative, Media and Technology at London-based accountancy firm haysmacintyre, says: “Increasingly, we are seeing companies use technology to deliver services that are traditionally supplied through physical and face-to-face service provision.”

Dawson continues, “On occasion, companies have been looking to brand themselves as tech companies, often helping to support fundraising and valuation aspirations. However, they should be mindful that HMRC may have a different view on what constitutes a technology business.”

Accountancy specialists warn companies may be applying valueadded tax (VAT) rules incorrectly.

Supplies of technology are liable to VAT, but service providers can be considered to be supplying the underlying service, which may have a different VAT treatment.

Changes in tax landscape Dougie Todd, VAT Partner at haysmacintyre, says the tax landscape has evolved in recent years regarding

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services delivered by technology and warns it will change further in the next 5–10 years. The challenge is particularly acute for companies that supply medical, educational or financial services, many of whom have now transitioned to supplying services digitally.

“There is a real tension between at what point does one stop being a supplier of these services, which have one VAT consequence, to becoming a supplier of tech services, which is treated differently,” explains Todd.

“Many businesses are still not aware of where that line starts and ends.”

Who is VAT-exempt?

In one example, if a patient speaks to a doctor remotely, that is still a supply of medical services and exempt from VAT. However, if people access a healthcare company’s website and data to research symptoms — that may be considered a supply of data and technology, which is no longer VAT-exempt.

Todd says that poses challenges for firms on where they can — and cannot — recover VAT on costs they incur.

Organisations that may have charged

Potential for legislation to change Companies using artificial intelligence (AI) to provide a medical diagnosis or education course would also become a supplier of technology. “In 5–10 years, we are going to see more businesses having to deal with the consequences of supplying technology rather than being core suppliers of medical, educational or other VAT-exempt services,” explains Todd.

Moreover, firms with an international market must be aware that VAT treatment is different when supplying a UK customer and a French customer, for example. However, a consequence of Brexit does give the UK the ability to change its own VAT laws more easily.

Todd suggests that organisations looking to enter the digital supplies market and assuming they can reclaim VAT on significant development costs seek advice. “Fundamentally, businesses need to consider two points: are you supplying services or are you supplying information or data? It is possible to be doing one or the other, or both, but businesses must be aware that each could have a very different consequence and could fundamentally impact a business’ financial model and, in some cases, make the operation uneconomic.”

Find out more at haysmacintyre.com

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Cybersecurity

Empowering cloud SMEs to deliver better public services at a lower cost

Starting a cybersecurity career: why an IT background is no longer required

Cloud SMEs have the potential to deliver the most innovative public sector solutions at better value for money for taxpayers. To do so, the Government needs to build a more open and transparent procurement system.

As the cyber workforce remains severely understaffed, the profession needs to embrace entry-level talent to create a safe and secure cyber world.

Jo Oliveira Business Development Lead at Unboxed Consulting Ltd & Member of the CCTA Advisory Board

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or many years, governments of all types have sought to increase public procurement spending on SMEs. There is rightly cross-party consensus on the benefits of greater SME participation in the delivery of public services.

Despite this, analysis by Tussell found that just £1 in every £5 (21%) spent by the Government in 2021 went to SMEs — some way short of the 33% target.

Association (CCTA), the trade association for cloud SMEs like Unboxed Consulting, has recently published a policy paper calling for the restoration of this proven framework. The paper makes a series of further recommendations for the Government that would level the playing field in public-sector tech procurement and ensure cloud SMEs are able to compete fairly for government contracts.

G-Cloud digital marketplace The benefits of the procurement Tech procurement has consistently system envisioned by the CCTA stood alone in meeting — and indeed are immense. Not only would the exceeding — the Government’s Government save money through target. In 2022/23, £3 billion was enabling greater competition, but by spent through the removing barriers to Government’s G-Cloud entry for SMEs, the The benefits of the framework, with 38% Government would procurement system going to SMEs. In some also have access to the years, almost half of most innovative public envisioned by the government spending sector solutions.

CCTA are immense. awarded to SMEs was Moreover, public through the Digital procurement is an Marketplace, comprising G-Cloud essential lever through which the and Digital Outcomes and Specialists Government can support tech SME (DOS). growth and dynamism, therefore However, despite the G-Cloud enhancing the productivity and wider Digital Marketplace’s track record of competitiveness of the economy. This supporting tech SMEs like Unboxed has the added benefit of reducing to access public sector contracts, regional inequalities and promoting in recent months, the Government prosperity across all regions of the UK. has closed this proven procurement CCTA members and cloud SMEs platform. These changes were have the potential to support better made without meaningful market public services at a lower cost to engagement and the replacement taxpayers and to deliver solutions system is markedly inferior, lacking in which transform our economy and transparency and open competition. daily lives for the better. It is time for the Government to enable them to A level playing field for SMEs do so.

I, therefore, welcome that the Cloud Consulting and Technology

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mid the current threat landscape, adoption of new technologies and increased regulation, there’s an unprecedented demand for qualified cybersecurity professionals. It’s estimated we need 73,439 professionals in the UK alone to safeguard digital assets.

Cybersecurity capabilities in the UK Only 54% of UK cybersecurity professionals believe their organisation has adequate tools and people to respond to cyber incidents over the next few years. The scarcity of skilled workers and the pressing need to boost the workforce are now pushing UK organisations to look beyond traditional approaches to resourcing.

Only through strengthening the nation’s cybersecurity workforce can we bolster the UK’s cyber resilience and support its ambition to be one of the safest places to do business online.

Embracing alternative training pathways Many cybersecurity professionals have IT backgrounds, with some pursuing a formal education path to earn a degree in computer science or a related field. While this traditional pathway has produced many highly skilled experts, it leaves the profession with diversity challenges and facing intense competition from other technical disciplines.

Meanwhile, research shows that nontechnical attributes and experience, such as problem-solving skills and effective communication, have developed into critical requirements

Ed Parsons, CISSP UK and Europe Director. ISC2

for success in the field. Professionals now require a unique combination of skills and attributes that extend beyond technical proficiency.

Fortunately, people with a natural aptitude for cybersecurity can develop technical expertise. Findings show that entry and junior-level hires with non-technical backgrounds are often ready to handle technical assignments within six months.

Updating tech hiring practices Organisations play a pivotal role in broadening recruitment strategies.

Hiring managers must work with HR to ensure alignment on job descriptions, realistic expectations of candidates and a focus on recruiting for the right skillsets — not limited by specific degrees or certifications.

Welcoming entry-level tech talent Understanding the need to provide individuals from all walks of life the opportunity to pursue a cybersecurity career, ISC2 launched its ‘One Million Certified in Cybersecurity’ programme. ISC2 is offering its entrylevel certification exam and training — free — for 1 million individuals.

It’s an open invitation to aspiring professionals who share a passion for safeguarding the digital world.

ISC2 is at the forefront of efforts to support newcomers’ cybersecurity professional development journeys.

So, whatever your background, the world of cybersecurity is ready for you to explore and contribute to its ongoing mission to create a safe and secure cyber world.

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How AI can protect organisations against cyberattacks Artificial intelligence is playing an increasing role in the early detection of cyberattacks and the protection of organisations around the world.

Attacks are getting more sophisticated and cyber-attackers are using AI to make their traditional phishing approaches appear even more contextual and relatable.

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vidence suggests that more than half of organisations in Europe have experienced data breaches in the last three years. Many fear such events lead to the loss of consumers due to an erosion of trust. Meanwhile, artificial intelligence (AI) is proving helpful, both in making attacks more sophisticated and with early threat detection and identification to combat cyberattacks.

Investing in security automation The findings come from technology services and consulting company Wipro and the recent 5th edition of its State of Cybersecurity Report (SOCR).

Drawing on a survey of global security leadership and data from its 17 cyber defence centres across North America, Europe, India, the Middle East and the APAC region, it found that 79% of respondents said security automation for attack detection and response is a top investment priority. Around 45% of enterprises said the biggest focus of internal security operations would be on using AI to tackle attacks.

Cyberattacks getting more sophisticated Josey George, Wipro’s Cybersecurity and Risk Services General Manager, says cybersecurity and AI are intertwined within the new tech landscape. “AI models will be the new attack surface in existing digital infrastructure, and adversarial machine learning attacks will increase in frequency and impact as adoption of AI scales up.”

He notes that open-source AI models will become essential for building trust and ensuring public safety. He adds: “While email phishing and ransomware consistently top the lists of threats, attacks are getting more sophisticated and cyber-attackers are using AI to make their traditional phishing approaches appear even more contextual and relatable.”

Cyberattack detection with responsible AI The main threat against the private and military sector is now from ‘nation-state actors,’ but the global cybersecurity ecosystem is using AI to fight back and detect attacks with natural language understanding and processing, which are used for threat intelligence gathering.

George says the aim is to minimise the possibility of attack, reduce the window of opportunity to cause damage and respond quickly. “We are now seeing a lot of momentum towards responsible AI, and risk and security plays an important role within that.” That momentum is coming from the US President’s office and the recent UK AI Safety Summit where the UK Government unveiled a ‘world-first agreement’ on how to manage the riskiest forms of AI. State of cybersecurity and AI in the UK AI models and systems are increasingly used to solve business problems, but they also face the risk of being attacked. Hitesh Bansal, Cybersecurity and Risk Services Senior Partner, warns: “AI will be your foe if you do not make it your friend.”

He observes that the UK and Ireland face significant challenges from state-sponsored attacks. “The threat landscape has evolved from ransomware to more advanced attacks by nation-state actors, which is a serious concern for the UK Government,” he says. He also notes that the post-Brexit situation has affected the cooperation with the EU on cybersecurity matters. Moreover, the UK’s extensive use of technology, especially in critical sectors like energy and healthcare, exposes it to more cyber risks.

Sustainability challenge in AI AI also introduces challenges related to an organisation’s sustainability goals and commitments, according to Adam Savitz, Wipro’s Sustainability Senior Partner. With experience building sustainability strategies, he says: “One of the most recognised areas of challenge comes with the increase in data requirements, driving an increase in both an organisation’s data and environmental footprint.”

A further challenge comes with the increase in smarter technologies; he says this may indeed open an organisation up to cybersecurity risks for customers. “Organisations are coming to terms with a more considered approach to technology,” continues Savitz, “from technology policies around data storage to design consideration across the technology stack, including aspects of AI. Technology organisations are introducing new training and skills in how to architect, design and develop where sustainability and AI are considered.”

INTERVIEW WITH Hitesh Bansal, Cybersecurity and Risk Services Senior Partner, Wipro

INTERVIEW WITH Josey George Cybersecurity and Risk Services General Manager, Wipro

INTERVIEW WITH Adam Savitz Sustainability Senior Partner, Wipro

WRITTEN BY Mark Nicholls

Paid for by Wipro

Find out more at wipro.com/ cybersecurity

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Future of Work

WRITTEN BY Richard Kauntze Chief Executive, The British Council for Offices

Why next-generation offices should benefit employees — and local communities

The purpose of the office has been transformed and is evolving alongside the role of ‘office work,’ and it should benefit both the workforce and local community.

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he built environment is the only unavoidable art,” says Lord Deben, Former Chairman of the Committee on Climate Change, in a gathering of experts involved in the development of offices. Addressing the British Council for Offices (BCO) ESG London Conference, he also acknowledges that the industry is not just there to create buildings and is, fundamentally, about providing workspaces for people.

year’s BCO Awards, is a great example of how a workplace can deliver benefits for both the people who work there and those who live nearby, through considered placemaking and social initiatives. Welcoming the public, the campus includes a new city centre park, a sustainability education centre, community spaces designed for social enterprises and local entrepreneurs and an Eagle Lab to support Glasgow tech startups.

Barclays is one particularly impressive example, but making Offices that inspire a social impact is high employees on the agenda for most We must The office is no longer the organisations. Forwardonly place where we go to thinking businesses harness the work, and ‘pure work’ is recognise that offices new role of the no longer the only reason are not spaceships. If a office to provide building — or campus to go to the office, which is rapidly becoming a — connects to the places for hub of inspiration and people to thrive. wider city, it can have innovation — a place a transformative and where connection, lasting effect on broader community and collaboration are communities and local economies. concentrated.

We must harness the new role of the Fulfilling modern workforce goals office to provide places for people to Delivering social value is not just a thrive. By that, I do not just mean the ‘nice thing to do’ — it makes good people working in the building but the business sense. Numerous surveys wider community, too. The best offices have shown that the next generation not only support a sustainable and of talent is seeking greater purpose in productive work culture and enhance their jobs and prepared to turn down employee wellbeing but also engage an employer unlikely to offer them with their surrounding communities the opportunity to make a difference. in meaningful and impactful ways.

In the new world of work, the office is at the centre of unlocking true value Creating a positive impact on communities for people.

Barclays’ new Glasgow campus, crowned the ‘Best of the Best’ at this

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Making the future work: how the adoption of AI can build ‘good work’

WRITTEN BY Anna Thomas Co-Founder and Director, Institute for the Future of Work

As world leaders and tech bosses left the UK Government’s AI Safety Summit in November, there was a strong move towards responsible regulation and governance, with the ‘future of work’ as a particular focus.

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esearch that the Institute for the Future of Work (IFOW) published in September for the Pissarides Review into the Future of Work and Wellbeing, funded by the Nuffield Foundation, offers evidence that the adoption of AI and automation technologies can lead to positive outcomes for businesses and workers.

Technology should complement jobs Professor James Hayton’s analysis of a survey of 1,000 UK firms found a net positive impact of adoption on job numbers and skills. These effects were strongest where there was better ‘regional innovation readiness’ — an aggregate measure of, among other things, local broadband infrastructure and workforce skill level.

This has implications for policymakers; ‘levelling up’ regions in terms of these factors is vital to ensuring that this technological revolution doesn’t lead to reductions in job numbers or reductions in the skill level of available jobs.

Tech adoption that engages employees Most importantly, Professor Hayton’s work found that when firms adopt AI and automation technologies, increases in job quality were strongly associated with a ‘high engagement’ HR philosophy.

When firms engage workers positively in the design, development and deployment of new technologies, the result is more ‘good work.’

This is work that is more than just employment. It is work that promotes

dignity, autonomy and equality; work that has fair pay and conditions; work where people are properly supported to develop their talents.

Conversely, where firms failed to engage workers through the process of the adoption of new technologies, job quality was reduced. Research shows that the erosion of good work leads to negative impacts on employee engagement and health, social cohesion in communities and economic resilience.

Impact of good governance A strong research base is emerging, telling us how we can help innovation and social good to progress together through this technological revolution.

We need good governance and regulation at the government level.

However, we also need to support firms with practical mechanisms by which they can sustain a culture of human-centred, high-engagement HR management. If this can be achieved, we can make the future work and deliver an economy where the benefits of these transformative technologies are shared widely for the good of all.

The Institute for the Future of Work is an independent research and development institute exploring how new technologies are transforming work and working lives.

Sign up for our monthly newsletter offering the latest developments in the Future of Work at ifow.org

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Rising above the noise: what AI means for the workplace of tomorrow An informative white paper unveils how AI will soon craft office environments that are as intelligent and dynamic as the people within them.

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new whitepaper from ISS, ‘Rising Above the Noise: What AI Means for the Built Office Environment,’ provides a grounded perspective on the future interplay between artificial intelligence (AI) and the evolution of workplace environments. Steering away from the abstract, it offers a detailed examination of AI’s prospective impact on the office spaces of tomorrow.

WRITTEN BY James Brazier Commercial Innovation Director, ISS UK & Ireland

Paid for by ISS

Talent attraction and retention: creating inclusive cultures AI will change the landscape of talent management by enhancing recruitment and retention strategies. With a focus on human-centric values, AI will help build a workplace culture that attracts, mentors and retains diverse talent.

Information security: fortifying trust and safety Energy: smart grids and decarbonisation AI stands at the forefront of a new era in information AI is set to revolutionise energy management within office security, bolstering defences and creating trust within the buildings — driving the development of smart microgrids digital infrastructure of modern offices. It will safeguard and supporting ambitious decarbonisation data and the people who rely on it every day. strategies for a more sustainable and The report outlines a energy-efficient future.

A grounded vision for AI integration ISS’s white paper serves as a testament to future where AI will Building sustainability: intelligent design and our strategic and thoughtful approach to not only enhance operation integrating AI into the workplaces of the operational efficiency future. It outlines a future where AI will not Pioneering the next wave of sustainable building practices, AI will enable the only enhance operational efficiency but also but also enrich the creation of living, responsive structures enrich the human experience, ensuring that human experience. that optimise their own operation and workplaces remain spaces where people maintenance to significantly reduce their thrive. environmental footprint.

As we move forward, ISS is dedicated to turning these Workplace experience: cultivating human connection insights into action, proving that when harnessed correctly, Envisioned as the new catalyst for workplace enhancement, AI will be a powerful ally in creating workspaces that truly AI will play a key role in designing spaces that nurture embody the principle that ‘people make places.’ creativity and collaboration — fostering a work environment that prioritises human wellbeing alongside productivity.

Scan the QR code to learn more about the white paper.

risingabove thenoise.ai

Unlocking the potential of young entrepreneurs for economic growth Nearly half of young people aspire to be entrepreneurs. Yet only 1 in 10 is working on a startup. Governments need to step up their support to unlock youth-led enterprises.

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new survey by the European Commission shows that nearly half of young people (46%) would consider starting a business, and 39% would prefer to be self-employed than working as an employee. However, youth do not always act on these ambitions. Across the OECD, only 9% of young people were working on launching a startup, and only 7% in the UK.

WRITTEN BY David Halabisky Project Coordinator, Inclusive and Sustainable Entrepreneurship Centre for Entrepreneurship, SMEs, Regions and Cities, OECD

programmes to support young entrepreneurs, including training, microfinance and coaching. However, while there are examples of successful support schemes, the new OECDEU Missing Entrepreneurs 2023 report shows the impact of public support has been mixed.

Once again, it’s not all about the money. Evaluations suggest that financial support is critical but needs to be paired with the right training and/or Entrepreneurial ambitions of young people coaching to set young entrepreneurs on the Only 4 in 10 young right path.

It’s not all about the money. While a quarter of budding young entrepreneurs dream One country that appears to be getting people report that it right of being wealthy, just as many wanted the is Canada, where new business ability to work on their own terms, and they have the skills creation rates among young people were many more — nearly half — were primarily the highest in the OECD over the period and knowledge to motivated by the freedom to follow their 2018–22. This follows years of investing passion and interests. Meanwhile, one in in building an entrepreneurial culture, start a business. seven instead start their business to pursue underpinned by support programmes such social and/or environmental goals. as Futurepreneur, which supports aspiring young entrepreneurs with financing, online resources and Governments can tap into young entrepreneurial talent mentoring through a network of more than 2,600 volunteer Yet, young entrepreneurs face many obstacles. The vast mentors. majority are forced to rely on their own financial resources, As we look for ways to reignite the economy, it might and only 4 in 10 young people report that they have the just be time for a new policy mix — one that backs young skills and knowledge to start a business. entrepreneurs to forge a new future.

Governments can help. Many have established dedicated

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Why due diligence is now a vital step to accessing innovation incentives Why the future of tax is digital, easier and up to date Craig Ogilvie Director of Making Tax Digital, HMRC

We’re building a modern, digital tax system that will help businesses get their taxes right, save them time and bring in money for essential public services.

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igital innovation touches every aspect of our daily lives and, at HMRC, we’re working hard to make it simpler for everyone to manage their tax affairs digitally, too.

Easier way of reporting income We have successfully delivered changes to how customers manage Value Added Tax (VAT), and now, nearly 2 million businesses use compatible software to submit VAT returns digitally. Many businesses report that the new process is easier; importantly, satisfaction with our digital services is consistently above 80%.

The year 2026 will see the first phase of Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) rolled out — when self-employed individuals and landlords will start using compatible software for digital record-keeping and updating HMRC. The majority (97%) of Self Assessment (SA) customers already file their tax returns online, and MTD will bring new benefits of a real-time, digital approach. We’re building the service now, so people who sign up early will experience these benefits before anyone else.

Quicker record-keeping with less error risk MTD is delivering groundwork for technology changes that will bring individuals’ and businesses’ interactions with the tax system in line with the other digital services they use daily.

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Improved, digital record-keeping — done in close to real-time — will help self-employed people and landlords worry less about making a mistake and save them time when they come to submit their end-of-year tax return, as all their records will be up to date.

Currently, there’s no requirement to create up-to-date records during the tax year; this increases the risk of unintentional customer errors in annual tax returns as relevant transactions could date back up to 21 months.

Studies have shown that 67% of businesses feel using compatible software to submit VAT returns digitally has reduced the potential for mistakes in their record-keeping.

Greater productivity and support Evidence also indicates that using compatible software is encouraging businesses to digitalise more generally due to productivity benefits. Reducing mistakes gives business owners greater certainty in their finances while minimising the amount of unpaid tax owed — ensuring everyone pays their fair share.

It also frees up HMRC resources, so we can help people with more complex circumstances needing one-to-one support. MTD is not the whole story of how we’re transforming the UK tax system, but it’s a very important chapter.

For more information, visit gov.uk and search ‘Making Tax Digital for Income Tax’.

Research and development (R&D) tax incentives play an important role in funding innovation, but policy changes and a new approach from HMRC have added complexity and risk for companies claiming relief.

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t ForrestBrown, we’ve been helping the UK’s most innovative businesses secure funding for R&D for over a decade. We’ve submitted more than 13,500 claims, won awards from our peers for the quality of advice we provide and remain the only R&D adviser to win a First Tier Tax Tribunal on behalf of a client.

businesses are failing to meet the new requirements, which also include providing a set number of detailed project descriptions.

Others are caught in timeconsuming enquiries, sometimes forced to sacrifice the tax relief to which they are entitled because their adviser has little experience in negotiating with HMRC.

Innovative businesses securing funding For most of this time, R&D tax policy remained relatively unchanged, and this stability helped businesses plan their long-term investment with confidence. We see the positive results of R&D tax relief in the revolutionary innovations of our clients — from fridge-free vaccines to jet suits for first responders.

Fresh insights to avoid pitfalls To avoid these pitfalls, businesses need to undertake proper due diligence when appointing an adviser. Membership of a professional body like the Chartered Institute of Taxation is an essential starting point.

At ForrestBrown, we’re committed to shaping a positive future for the incentive, so we actively engage in government consultations on R&D, enabling us to bring these insights to our fresh approach and advice to clients.

The good news is that R&D tax relief remains a vital lever for government to encourage private sector investment. Innovative businesses can therefore remain confident in the incentive but must equip themselves with the right advice from the outset to ensure they’re fulfilling the new requirements.

Businesses need to undertake proper due diligence when appointing an adviser.

Reforms and compliance focus However, recent reforms — combined with HMRC’s heightened focus on compliance — present new challenges.

Driven by an understandable desire to crack down on error and fraud, R&D tax relief claims now carry an increased risk of enquiry for all, leaving legitimate innovators exposed if they haven’t engaged expert advice at the right time.

A case in point is the additional information form, which became mandatory earlier this year. Many

WRITTEN BY Sara Brigden Managing Director, ForrestBrown

Paid for by ForrestBrown

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