How blockchain and emerging tech companies can benefit from tax R&D (research and development) credits. Shaun Bartle from Burton Sweet Tax Advisory Services tells all.
Q: How did you get into crypto and Blockchain?
A: The first time I heard about Bitcoin came about when I was watching the US legal drama “The Good Wife” in 2015. I thought it was a cool concept and decided to look into it a bit more. The idea immediately grabbed my attention and after some further research I decided to personally invest in various Cryptocurrencies.
Q: How long have you been working in tax and accounting?
A: Too long! Just kidding… I’ve been working in tax and accounting for ten years now, having started in industry before moving into practice. The move into practice was so I could add real value to other businesses and be involved in multiple industries and sectors.
Q: What made you or your firm decide to focus on tax and accounting for Blockchain?
A: I’m highly interested in technology, in particular emerging technologies within FinTech (Financial Technology) and A.I.
Blockchain has huge potential to disrupt so many industries and completely revolutionise the way we live and work, so it made sense to focus on this area and be an early adopter and specialist.
Also, companies that do not move with the times get left behind and I certainly didn’t want to be in that situation.
Q: What advice would you give regarding tax and accounting for Blockchain start-ups and companies?
A: Most Blockchain start up’s are likely to be pushing the boundaries of innovation and therefore may qualify for the UK Governments’ R&D scheme (see below). Therefore, by ensuring you have the right professionals in place they will be able to spot and advise in these areas and save you cash.
Accountants and Tax Advisors can add real value to the business, especially in the early stages where cash may not necessarily be flowing in the right direction.
Q: What can you teach us about tax R&D credits?
A: How much time do you have?
There is a great correlation here between emerging technologies, such as Blockchain, and Tax (I know tax isn’t exciting to most of you, but please stick with me here).
This incentive can allow companies to claim back some of the costs they’ve spent on qualifying R&D activity and applies to both profit and loss making companies
As an example, if a company has £10,000 of qualifying costs, the R&D tax relief allows an additional 130% to be deducted. Think of this like a steroid injection on the costs:
- Qualifying Costs: £10,000
- Additional R&D Enhancement @ 130% (steroid injection): £13,000
- Total Enhanced Qualifying Expenditure: £23,000
Therefore the company would receive tax relief on the £23,000, despite only spending £10,000!
This emphasises how beneficial this can be to a company who is looking to innovate.
Q: What are you most excited by in the space?
A: The hype around cryptocurrency and Blockchain is like nothing I’ve ever seen before. It’s where finance and technology really come together and can have a huge impact on everything.
I’m excited to see how big Blockchain becomes, as we are already seeing some of the biggest names in the world trialling and adopting the technology.
Regarding Cryptocurrency, I’m excited to see who the end players will be. We’ve seen a LOT of scam coins and ICO’s etc., but that appears to be dying down now. Only the most efficient Cryptocurrencies will last and it will be interesting to see who comes out as the Crypto King!
Q: How do you think Crypto Curry Club is pivotal to the community and growing crypto and Blockchain adoption?
A: I think having a club of like-minded people who are passionate about a common thing is a great idea. As the adoption of Blockchain and Crypto grows, so will the demand for regional clubs for people who are interested in the technology to meet and share stories and views. The Crypto Curry Club fills this void and is getting into the market at the right time.
Everyone who is a member and attends the events is passionate about Blockchain. It’s great to see so many people, all from different backgrounds and industries, with a common interest. The variety of people will mean the word will spread quicker and to more people.
Plus, we can’t forget the curry. What’s not to love there!
Shaun Bartle MAAT
Tax Advisory – R&D Tax Specialist
Firm: Burton Sweet Tax Advisory Services