Tax Incentives Can Help Your Profits; David Beech, Corporate Tax Partner, Deloitte & Touche Examines the Tax Implications for Businesses

Daily Post (Liverpool, England), February 20, 2002 | Go to article overview

Tax Incentives Can Help Your Profits; David Beech, Corporate Tax Partner, Deloitte & Touche Examines the Tax Implications for Businesses


Byline: David Beech

TECHNOLOGY companies often have high growth, high risk profiles with the cash constraints which many expanding companies have to deal with.

Fortunately, there are several tax incentives which have been introduced in recent years which can be very helpful in these circumstances.

One important issue facing technology companies, particularly in the early years, is paying their key staff well enough to retain them at a time when the company might not be able to afford high cash wages. The Enterprise Management Incentive scheme is an ideal way of providing substantial incentives to important staff without draining cash and profits.

The EMI is almost two years old and is proving to be a great success in this sector. It is a very flexible share option scheme which allows a growing company to provide shares for its key employees in an extremely tax-efficient way. Originally, the number of employees who could benefit from this type of arrangement was restricted but now a company can reward as many of it's staff as it wants in this way.

If the company is successful, the employee normally gets the opportunity to cash in on a sale of its shares and only pay 10 per cent tax on the profit.

Unlike previous share schemes, the EMI is not burdened by a raft of restrictive rules.

The Enterprise Investment Scheme is another of the more important tax incentives to help technology companies get started or to raise additional share capital. The EIS offers three important tax benefits to individuals who are willing to invest risk capital.

A 20 per cent income tax repayment A deferral of Capital Gains Tax, which could save up to 40 per cent taxation A tax-free capital gain on ultimate sale of the investment The first two incentives mean that for an investor who has generated capital gains in recent years, an investment of pounds 100,000 risk capital in a technology company could generate a tax refund from the Inland Revenue of pounds 60,000. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Tax Incentives Can Help Your Profits; David Beech, Corporate Tax Partner, Deloitte & Touche Examines the Tax Implications for Businesses
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.