AEROSPACE SECTOR SET FOR £343M ELECTRIC PLANES BOOST

The UK’s aerospace sector looks set to be propelled into a new era of cleaner, greener flight through a £343m programme of investments.

The money will comprise a £255m boost supported by the Aerospace Technology Institute (ATI) and UK Research & Innovation (UKRI), which will go towards 18 new research and technology projects, including the development of hybrid aircraft.

To support small and medium-sized companies, £68m of the funding will be made available to increase research and development opportunities, with £20m to drive improvements in long-term productivity across the sector.

The projects are designed to help maintain the UK’s existing strengths in aerospace and position the UK as a “world leader” for some of the most technologically advanced aircraft that will “transform the face of aviation” including electric aircraft, hybrid-electric propulsion systems, and future materials for aircraft manufacturing.

A major beneficiary of the latest research and development funding is the E-Fan X project, which brings together Airbus, Rolls-Royce and Siemens to develop a flying electrical demonstrator which will form the foundation for future electrical aircraft.

Speaking at the 2018 Farnborough International Airshow, business and energy secretary Greg Clark said: “The UK has a rich heritage in civil aviation as the home of the jet engine and the wings factory of the world. Technology is driving revolutionary changes in aviation that have not been seen since the 1970s and today’s investment is foundational to the future of commercial aviation and ensuring the UK remains at the cutting-edge of the sector.

“This revolution in civil aerospace will bring significant benefits to UK industry, passengers and the environment.”

Aviation minister Baroness Sugg added: “The development of quicker, quieter and cleaner aircraft will transform the UK’s transport market and open up new and more sustainable ways for passengers to travel between our cities and regions and across the globe.

“Developing innovation, technology and skills is a core part of the government’s Aviation Strategy and this funding will help us to ensure that the UK aviation sector continues to be a world leader in this area.”

Source: Matthew Ord, Insider Media, 17th July 2018

BODYCOTE TO OPEN AMP FACILITY

Listed heat treatment and thermal processing services specialist Bodycote is to open a new facility in Rotherham.

The site will be located at the Advanced Manufacturing Park (AMP) and has been designed to support the aerospace and power generation markets in the UK and Europe.

Set to become fully operational later this year, it will offer a number of heat treatment processes.

Simon Blantern, vice president of sales Europe for Bodycote’s aerospace, defence and energy heat treatment division, said: “This investment demonstrates Bodycote’s continuing commitment to align resources to serve both the aerospace and power generation markets.”

Earlier this year, Bodycote reported that sales for the year to 31 December 2017 were £690m compared to £601m during the previous 12 months. Pre-tax profits also increased from £91.9m to £117m.

Source: Matthew Ord, Insider Media, 17th July 2018

Top Ten Tax Tips for Manufacturers

It’s never too early to start thinking about tax so here are ten of our top tax tips to help you save money and meet your business goals.

  1. Research & Development Tax Credits

R&D tax reliefs offer a reduction in corporation tax liabilities for companies which are making ‘appreciable’ improvements to technology – for instance, this can mean producing something in a more efficient way, or making something cheaper, lighter, faster. This could also include process improvement for, say, a manufacturing process.

The potential benefits of the R&D scheme can be significant. As an illustration, £100,000 of identified qualifying costs (including staff salary costs, materials, subcontractor costs) can lead to a tax reduction of almost £25,000.

Loss-making companies can further benefit from this generous scheme by surrendering losses generated by the R&D activities in return for a cash repayment from HMRC.

  1. Accelerate Tax Relief Through Capital Allowances

The Annual Investment Allowance (AIA) allows businesses to claim 100% of the cost of plant and machinery purchased each year as a deduction from taxable profits, subject to a £200,000 cap. Consider the timing of making purchases to maximize tax savings. If you have already spent £200,000 in the current accounting period, could you defer any further expenditure until the next accounting period? Can you bring forward any capital expenditure to take advantage of the higher 19% rate of corporation tax relief before it reduces to 17% in April 2020?

  1. Doing Business Overseas

Keep track of annual sales overseas to non-business customers, if the turnover threshold is exceeded you may have register for VAT in that territory.

It can be easy to overlook the requirements of overseas tax authorities when trading overseas. Consider the following:

  • Are you making sufficient sales to one particular country that you are required to register for VAT in that territory?
  • Do you employ workers from overseas and are you making the correct declarations?
  • If you have any overseas premises or have representation overseas, you may be liable to pay corporation tax in that territory.
  1. Hidden Tax Relief in Commercial Property

Buildings and structures do not generally qualify for tax relief which means a lot of tax relief goes missing when purchasing or improving commercial properties. Your industrial building could hold up to 30% of expenditure eligible for capital allowances. It is literally hidden within the walls! Shorts have a number of experts in this area who can help you by undertaking expenditure reviews and building surveys to identify eligible expenditure, allowing you to maximize your claim for tax relief.

  1. Tax Efficient Reward and Retention of Key Employees

It can be difficult to retain key employees without breaking the bank but by offering share options, such as Enterprise Management Incentive (EMI) schemes, you can encourage and reward key members of staff in a tax efficient way for both the company and the employees.

  1. Lower Tax Rates on Intellectual Property

Corporate holders of UK patents could benefit from tax rates as low as 10% in respect of profits arising from patent royalties or patented products.

  1. Protect Assets from Trading Risk or Divest Non-Core Activities

There are a number of tax free ways of restructuring groups of companies which could enable you to structure your business to suit your objectives. If your goal is to protect assets, such as tangible property or intellectual property, or if you simply want to separate non-core elements of the business with the view to selling then you should consider restructuring.

  1. Tax Efficient Remuneration

By planning salary and dividend levels in advance, you can ensure you are remunerated in the most tax efficient way which means no unexpected surprises when you calculate your tax liability. You should also consider if you can make any pre-year end pension contributions to reduce the company’s tax liability. Individuals are subject to an annual pension contribution allowance of £40,000 each year which includes both personal contributions and employer contributions. If you were a member of a registered pension scheme in a tax year and have unused annual allowance this can be carried forward up to 3 years so, even if you don’t plan to make any contributions this year, being a member of a pension scheme now may allow you make significant contributions in later years.

  1. Be “Exit-Ready”

When selling up and exiting the business, you’re likely to benefit from lower rates of capital gains tax. If this is a short-term goal, consider holding off on declaring any excessive dividends and retain profits in the company to benefit from lower rates of tax on sale.

  1. Get Your Personal Affairs in Order

Have you made appropriate arrangements for succession of the business and have you quantified and catered for any potential inheritance tax liabilities arising upon your passing?

By making such arrangements as key-man insurance policies and keeping an up to date will, you can ensure the business is protected on your passing. Effective inheritance tax planning can ensure your descendants are not left with unexpected tax liabilities.

While we hope this gives you food for thought, tax planning should not be undertaken without taking the appropriate advice.  Anyone wanting to discuss any of the points raised above can contact a member of Shorts’ tax team for a free initial consultation by calling 0114 2671617 or emailing info@shorts.uk.com

“TRANSITIONAL YEAR” AS NAYLOR INDUSTRIES COMPLETES INVESTMENT PROGRAMME

Turnover growth has paused at Naylor Industries as the Barnsley-based construction materials manufacturer completed a £14.8m investment programme.

The group said the 12 months ending February 28 2018 as a “transitional year”. Turnover was £50.1m, just below the £51.3m of the previous period, as a result of the major development work.

As part of the investment programme, Naylor Industries built a £5m big pipe factory, opened by the Queen’s cousin HRH the Duke of Kent in October 2017; relocated two group businesses to newly purchased and modernised freehold sites at Barugh Green and Wombwell; and acquired White’s, a complementary precast concrete business.

The financial year also included the disposal of a non-core business, the Hyde-based materials processor Naylor Polymers.

Despite the financial impact of the disposals and the operational disruption caused by the relocations, equipment moves and the building and commissioning of the new factory, the company generated an operating profit before exceptional items of £1.8m, compared to the previous year’s £3.4m.

Chief executive Edward Naylor said: Following a long sequence of years of record-breaking turnover, we recognised the need to increase capacity and initiated a transformational capital investment programme. Not surprisingly, this development work led to a pause in turnover growth in 2017-18, although we managed to maintain sales at close to the previous year’s levels.

“With our three-year capital investment programme concluded and a number of innovative new environmental products brought to market, we are excited about the short and medium-term prospects of the business.

“After a weather-related slow start to 2018-19, we have seen an encouraging pick-up in sales across all our businesses and we believe we have laid the foundations for a period of significant growth and increased profitability.”

Source: Stephen Farrell, Insider Media, 12th July 2018

LOADHOG TURNOVER GROWS BY 26 PER CENT WITH REUSABLE PRODUCTS MEETING CUSTOMERS NEEDS

Loadhog, the packaging innovator, establishes close partnerships with companies to encourage them to swap one-trip packaging for reusable products. This has resulted in productive associations with companies such as Decathlon, enabling Loadhog to achieve a record £9.6m turnover, representing 26.6% growth in 2017.

Like Loadhog, Decathlon has recognised growing investment in reusable transit packaging (RTP) and the detrimental environment effect of plastic waste, the sports retailer talked to Loadhog as a manufacturer of ground-breaker RTP products.

Decathlon was already using RTP systems but wanted to extend its efforts to decrease packaging waste whilst increasing the performance of their packaging solutions. With Loadhog’s support Decathlon swapped its old broken collapsible containers for Loadhog’s version of innovative, sturdy design and manufactured using recycled material, with no adverse effects on performance. The resulting product is able to withstand the harsh environments of their distribution centres and speed up their picking processes.

With the market’s increasing interest in greener supply chain solutions, Loadhog, a member of the British Plastics Federation, is dedicated to supporting the worldwide campaign to reduce plastic waste. The company is currently using 50% recycled plastic in production with recycled plastic scrap generated in the factory or by external partners.

Loadhog general manager, Shaun Khan said: “There has been increased awareness of plastic pollution and much interest from high investing key companies, particularly from the postal, retail and automotive sectors. These factors are no doubt responsible for our growth.

“We actively encourage companies to recycle their own containers with our swap-out scheme and to invest in recycled material through innovation and the redesign of returnable packaging with no adverse effects on performance, ergonomics and aesthetics. Returnable packaging is certainly a growing and hugely valuable market which we will continue to support.”

For further information visit Loadhog.com.

Source: Proaktive PR

Degree apprenticeships key to Northern Powerhouse

A key conference will hear today that Government action to boost degree apprenticeships could help grow the economy in the north of England.

 A series of recommendations have been made in a letter to the Rt Hon Anne Milton MP, Minister of State for Apprenticeships and Skills, from Sheffield Hallam University, the Northern Powerhouse Partnership and the University Vocational Awards Council (UVAC).

A degree apprenticeship combines full-time paid work and part-time university study to offer new and existing employees the opportunity to gain a full Bachelors or Masters’ degree while undertaking practical, on-the-job training needed to become occupationally competent.

The letter points to the potential of degree apprenticeships in closing the skills gap and improving economic growth – particularly in the north of England.

The recommendations coincide with the Degree Apprenticeship National Conference today (Wednesday 27 June) at Sheffield Hallam University, held in partnership with UVAC.

Sheffield Hallam has established itself as one of the leading providers of Higher and Degree apprenticeships in the country, with a rapid expansion in provision and a new Centre of Excellence for Degree Apprenticeships set to open this autumn. The University offers a wide range of degree apprenticeships, including programmes in construction, digital and IT, engineering, finance, food technology, health and social care, and hospitality management.

The letter makes five recommendations:

  1. Provide better information on how to progress to a degree apprenticeship for schools, school leavers and families.
  2. Make the system easier for employers to determine the right degree apprenticeship for their business.
  3. Streamline procedures for creating degree apprenticeships.
  4. Provide stable funding which recognises that degree apprenticeships involve significant costs for universities and employers.
  5. Preserve the recognised transferrable value of degree attainment in  degree apprenticeships – rather than use of degree ‘level’ apprenticeships

The letter also recommends the creation of a coherent and substantial positive publicity campaign to raise awareness and profile of the benefits of degree apprenticeships, aimed at both learners and employers.

Professor Sir Chris Husbands, Vice-Chancellor at Sheffield Hallam University, said: “As one of the leading providers of degree apprenticeships, we have seen interest and applications rise significantly over the last two years – but we need to do more to support this alternative route into education and work.

“The funding system needs to be more streamlined in supporting pathways into higher level skills and encouraging more long-lasting collaborations between higher and further education to facilitate this.

“We must also do more to tackled perceptions which currently reinforce the model of a traditional full-time undergraduate degree entered by 18/19-year-olds. Significant work is needed to increase awareness of alternative routes and break down perceptions of their quality.

“An education system fit for the twenty-first century – which focuses on the long-term skills needs of the economy – must ensure the acquisition of both academic and technical skills, and to allow for their interdependence.”

Henri Murison, Director of Northern Powerhouse Partnership, said: “In the Northern Powerhouse Partnership ‘Educating the North’ report, launched earlier this year, we put the case clearly for the North to lead the world in degree apprenticeships. That is an aspiration which we celebrate that a number of the North’s institutions most focused on the skills challenge in the Northern Powerhouse, including Sheffield Hallam University, are already working to make happen.

“However, as we end the unhelpful divide between academic and work-based learning, and the difference in esteem between them both, the government and their relevant sounding and standards bodies need to avoid stifling the growth of degree apprenticeships. Global, national and great northern led businesses need to drive our ambition by spending more apprenticeship levy here in the North to close the skills gap.

“The current slow and cumbersome approval process and often inadequate funding per degree apprentice are a real threat and businesses will not accept this great opportunity for young people, those wanting to retrain for the next industrial revolution and their businesses, being lost.”

Adrian Anderson, Chief Executive of UVAC, said: “Employers have and are developing degree apprenticeships in occupations needed to deliver high quality public services, including nursing, policing and social work. In the private sector degree apprenticeships have and are being developed for a range of occupations including digital, engineering and construction vital to the Northern Powerhouse.

“The Government must guarantee that employers operating in the Northern Powerhouse have access to the degree apprenticeships their organisations need.”

Source: Sheffield Hallam University