Fair Tax Policy

Convivio aims to be a responsible company that makes a positive contribution to society.

We benefit from public services through the education and healthcare our staff receive, the protections of our security and legal system, transport infrastructure, a business and legal framework that enables us to operate, and simply by being in a society where our staff and families have their basic needs met and so can focus on higher economic contributions — and much, much more.

Therefore it is only right that we contribute back to society by paying a fair amount of tax.

We commit to:

  • Ensuring our accounts reflect the economic reality of the transactions we undertake in the course of our trade.

  • Fairly assessing and reporting our economic activity to the taxation authorities.

  • Paying the appropriate amount of taxes in line with the letter and also the spirit of all tax laws that apply to our operations.

  • Paying the correct tax in the right location, at the right time.

  • Considering fair tax measures in procuring all products and services that we use.

We commit to NOT:

  • Undertake specific transactions with the sole or main intent of securing tax advantages that would otherwise not be available to us based on the reality of our trading operations.

  • Undertake transactions that would require notification to HM Revenue & Customs under the Disclosure of Tax Avoidance Schemes Regulations

  • Participate in any arrangement to which it might be reasonably anticipated that the UK’s General Anti-Abuse Rule might apply.

  • Carry out operations in places generally considered to be tax havens

  • Where our clients or suppliers may have operations in places generally considered to be tax havens, we will not take advantage of those places to secure a tax advantage, and nor will we take advantage of the secrecy such jurisdictions provide for transactions recorded within them.

Our accounts will be prepared in compliance with this policy and will seek to provide all that information that authorities, including HM Revenue & Customs, might need to properly appraise our tax position.

Company details

Convivio is a digital agency that specialises in helping government develop and manage online services. We undertake consultancy, design and development to build the services, and then provide support. Clients include The Cabinet Office, The Ministry of Justice, The Judicial Appointments Commission and the Crown Prosecution Service.

Registration details

Registered Company Name: Convivio Team Ltd

Registered Address: 34b York Way, London, N1 9AB

Registered Number: 10213988

Registration in: England & Wales

Incorporation Date: 3rd June 2016

Financial Year End: 30th September

Companies House records: https://beta.companieshouse.gov.uk/company/10213988

Trading Address

This is the best address for normal correspondence: The Gridiron Building, One Pancras Square, London, N1C 4AG

Owners and Directors

100% of our shares are owned by Sarah Parks, a UK resident. Correspondence address: 34b York Way, London, N1 9AB.

We have one director, Steve Parks, a UK resident. Correspondence address: 34b York Way, London, N1 9AB.

Financing

Equity finance

The shareholder owns one ordinary share of £1 face value. There is no other equity finance.

Debt finance

The company had a £50,000 interest-free long-term loan from the shareholder, of which £30,000 remains outstanding as at year end Sept 2018. There is no external debt finance.

Annual accounts for year end Sept 2018

Our full accounts are available to view here:

Forecast

In September 2017, our forecast for the year was:

  • Turnover: £405,523

  • Profit before tax: £74,521

However, during the year we re-evaluated our business plan as Brexit, and political uncertainty around preparation for it, began to impact the UK economy, We decided as a team to cut back re-investment in growth in terms of recruitment, marketing and so on. We also decided to take on a larger than normal amount of work, but with the existing team. The intention was to focus on achieving a higher profitability to enable uis to grow our cash reserve, ready to be able to weather the economic impact in 2019.

Final results

The final results for the year ending 30 Sept 2018 were:

  • Turnover: £470,363

  • Profit before tax: £114,187

So we did better than forecast, and did succeed in growing our cash reserve in preparation for potential problems in the economy in 2019.

Payments to Directors

The director of the company was paid £52,292 salary in this financial year, all as PAYE.

Research and Development Tax Credits

Given our work in the digital sector we undertake research and development projects for ourselves, and our clients.

The government incentivises and rewards R&D to foster innovation using a system of tax credits managed by HMRC. Each year we submit a report on the projects we have done, the R&D elements of those, the staff time spent on them, and any resulting outputs. That report is then assessed and we are awarded a certain level of tax credit, which is calculated as a percentage of the staff time and other costs we have invested in the R&D.

This year, staff time and costs worth £70,072 was spent on R&D related work. This resulted in us being granted an R&D tax credit of £13,314.

Our R&D work included

  • Investigating machine learning and natural language processing to extract entity and term metadata from government research reports to aid searchability and sharing.

  • Investigating and prototyping approaches to conducting large scale load tests on government services in which authenticated users need to work through multi-step processes.

You can view some of the outcomes from our R&D on our blog, and in our Github repositories. We are working on publishing and releasing more of it.

Taxation

Corporation tax

The company made a profit, so the headline rate of corporation tax in this financial year is 19%. We were granted Research and Development Tax credits of £13,314 in this preiod for research work undertaken.

The Corporation Tax incurred by the company in this financial year was therefore calculated as:

Tax charge and adjustment details

£

%

Profit before tax

114,187

Corporation tax on profits before tax

21,696

19.0%

R&D Tax Credit relief

-13,314

-11.7%

Capital allowances in excess of depreciation

-1,833

-1.6%

Expenses not deductible for tax purposes

725

0.6%

Adjustment to tax charge in prior year

129

0.1%

Current Tax

7,403

6.5%

Deferred taxation

1,827

1.6%

Taxation as per the financial statements

9,230

8.1%

The net tax charge of £7,403 on a profit before tax of £114,187 gives an effective tax rate of 6.5% compared to the standard rate of 19%. The main reason for this difference between the current rate and the standard rate is the Research and Development ('R&D') tax credit. This is a government incentivises and rewards R&D to foster innovation using a system of tax credits managed by HMRC. Other factors effecting the tax charge are, capital allowances in excess of depreciation and expenses that do not qualify for tax relief (i.e. client entertaining).

The deferred taxation has arisen due to a timing difference in the purchase of fixed assets, where the tax relief has been claimed in full in the year of purchase and not when depreciation has been charged to the profit and loss account. The depreciation policy is 20% straight line.

PAYE / NIC

The company and our team paid £82,172.24 of PAYE/NIC to HMRC in this financial year.

VAT

The company raised £88,404 of VAT on behalf of HMRC in this financial year.

Therefore, the overall contribution in UK taxes generated as a result of our business activities was £179,806.24.

Annual accounts for year end Sept 2017

Our full accounts are available to view here:

Note that we have updated our accounts since they were first published, in order to provide more details of our tax reconciliation calculations for extra transparency. We've also submitted the amended accounts to Companies House. No financial details were changed.

Our first financial year was 15 months long, as we had 3 months of setup and 12 trading months.

Forecast

In June 2016, our forecast for the year was:

  • Turnover: £312,000

  • Profit/loss before tax: -£42,120

Final results

The final results for the year ending 30 Sept 2017 were:

  • Turnover: £365,425

  • Profit/loss before tax: -£9,384

  • Profit/loss after tax: +£3,045 (see note about corporation tax and R&D tax credits below)

So we did better than forecast.

Payments to Directors

The director of the company was paid £62,885 over the 15 months of the trading year (~£50k p.a. pro rated).

Taxation

Corporation tax

The company made a small loss before tax in its first year, and so the headline Corporation Tax rate for the period was 0%.

The Corporation Tax incurred by the company in this financial year was therefore calculated as:

Research and development tax credit receivable

£12,619

Deferred taxation

(£190)

Taxation on loss on normal activities - P&L account

£12,429

The deferred taxation has arisen due to a timing difference in the purchase of fixed assets, where the tax relief has been claimed in full in the year of purchase and not when depreciation has been charged to the profit and loss account. The depreciation policy is 20% straight line.

PAYE / NIC

The company and our team paid £95,776.12 of PAYE/NIC to HMRC in this 15-month financial year.

VAT

The company raised £42,749 of VAT on behalf of HMRC in this financial year. A substantial amount of work in our first year was for clients in the USA, so no VAT was chargeable.

Therefore, the overall contribution in UK taxes generated as a result of our business activities was £126,096.12.