On her company website, Louise Barth asks a straightforward question – What if your competitors are receiving 100% legitimate tax relief that you don’t even know about? – food for thought, certainly, and a reality for many.
Passionate about both her home county of Bedfordshire and the construction sector and those who work in it, Louise set up Barth Consulting three years ago after moving away from the corporate world in London to set up her own business.
Excited by the development that is going on in the area and the opportunities that affords the business community, she put her vast experience to good use to help and advise those who are entitled to enjoy the benefits of the government’s capital allowances relief.
“After graduating from university, I came home to Luton and began working as a quantity surveyor, working on some of the biggest and most exciting projects going on at that time, including with Beefeater restaurants and Vauxhall Motors, on their new European parts warehouse extension on Toddington Road,” said Louise. “I was working on some of the largest projects in the area at a time when there was a recession going on, and it was exciting to be part of it and helping to make things happen.”
Moving to London to specialise in capital allowances, Louise remained on the periphery of the construction sector. Far from being an accountant or a ‘numbers’ person, Louise put her enquiring mind and, in her words, nosiness, to best use, getting down to the detail of projects and assessing what tax relief clients might be entitled to.
Capital allowance can be claimed by the owner of commercial property who pays UK tax. It is a relief on plant and machinery, and fixtures such as electrical, water, heating and sanitary systems, as well as many other assets.
Around the same time, Research and Development (R&D) Tax Credits were made available to all businesses, in any sector, that are carrying out some kind of R&D work. The tax credits are a government-backed incentive to reward UK companies investing in innovation in products, processes and services or improving existing ones.
“As the question on my website implies, the fact is that many businesses are missing out on valuable tax relief simply because they don’t know the facts, and, in a lot of cases, their accountants don’t know the system well enough, to be confident about putting in a claim,” said Louise.
“I found when I started working on capital allowances that it appealed to my natural nosiness and my love of detail. I would get to look at every aspect of a business, digging down to find the ways in which investment in buildings, renovations or new construction, qualified for tax relief.
“In the case of R&D Tax Credits, people hear that and think it’s about science labs or IT innovation, but that’s not the case. Any company that is spending money on innovating or improving their products or services can claim it – it’s usually a fast turnaround in terms of getting a decision, so it’s great for cash flow and once you’ve got the go ahead, the benefits are immediate.”
Current statistics show that in the region of 85% of businesses that would qualify for R&D Tax Credits are not claiming money they are entitled to, while many miss out on capital allowances because they aren’t clear about rules and regulations.
“Most accountants are not surveyors and therefore not experienced enough to value fixtures correctly, or have the time to keep up with changes to legislation, so it makes sense to get expert help on a specialist subject,” added Louise.
“I use my knowledge and understanding of the general accounting practices and the construction sector as a whole, to identify what expenditure in a business qualify for capital allowances. From there, I put forward the claim and negotiate with HMRC where necessary to get the best possible outcome for the client. For R&D Tax Credits, my role is to advise on whether or not the business has a claim, and then I get them in front of a Chartered Tax Advisor to help them compile a claim that will stand up to scrutiny of HMRC.
“This isn’t about tax avoidance, or creative accounting, it’s simply good housekeeping with some tax planning thrown in, which helps tax paying businesses take advantage of these government backed schemes to reduce their tax bills and save a lot of money.