R&D and grants
R&D can be costly, not only in itself but also in the fact that payback can take months if not years, but it needs financing. The UK has some of the most effective tax reliefs available for this type of expenditure in the form of R&D tax credits – under approved Government legislation.
The firms specialist Innovation & Technology Group comprises engineers, software programmers and scientists as well as specialist finance professionals such as auditors and tax accountants all of whom are experienced in claiming R&D tax relief.
If you can answer
to any of the following questions you may qualify for R&D tax relief.
· Do you believe you have made any advances in science and/or technology?
· Do you employ any engineers, scientists or software developers?
· Do you manufacture anything?
· Have you developed your own software?
· Do you carry out design work?
· Are you using existing technologies in a unique way or combining or interfacing two or more existing technologies in a way they have never previously been combined?
· Have you developed any software-driven processes that improve internal efficiencies (e.g. interfacing, processing speed, real-time processing, platforms etc.)
· Have you developed any non-software-driven internal processes that reduce production times or cost or improve scalability?
· Have any other companies asked you to undertake design, manufacturing, or software development to assist with any part of their projects?
· Do you subcontract anyone to carry out design, manufacturing, scientific or technological work for you?
· Are you a market leader or seeking to become the market leader in your chosen sector?
· Have you filed any patents?
If your company performs any activities that fall within the tax definition of research and development you should be claiming the generous additional R&D tax reliefs that are available. SMEs can enhance their qualifying expenditure by 130% (125% before 1 April 2015) as well as having the option to convert tax losses created by the relief into cash.
Large companies also benefit by virtue of a 30% enhancement to qualifying costs. Alternatively, since 1 April 2015 they can elect for a 11% tax credit in their accounts that can trigger a tax repayment even in the event they have not paid any corporation tax.
These credits are aimed at companies that are actively involved in research and development. This includes the innovation, improvement or development of a process, product or service. The R&D work is not restricted to any one industry and goes beyond the typical men in white coats scenarios. We have made successful claims for companies in the following sectors:
· life sciences and pharmaceuticals;
· software development;
· industrial and mechanical engineering;
· renewables and recycling;
· electronic products;
· defence and aerospace;
· house building and construction;
· food technology;
We have extensive experience in assisting companies to identify those activities and associated costs that could be included in a claim thereby either yielding an increased tax deduction or a tax repayment. Once finalised, the information is summarised and a report is submitted to HMRC with the companys tax return. If HMRC opens an enquiry into the claim, we will negotiate with them on your behalf and seek to ensure that this is settled without delay.
Further, even if you are already claiming R&D tax relief we often find that our specialist R&D Team are able to identify additional qualifying projects. We have reviewed lots of claims and have submitted replacement claims to HMRC where we believe the previous claims to be understated. Our second opinion service operates on a standalone basis and we structure our fees dependent on success.
Government-awarded grants are available to help businesses fund projects. Applying for a grant can be time-consuming and confusing and, as a result, many businesses miss the opportunity.
Grants are awarded based on your location and the nature of your project. The most successful applicants are those who best demonstrate their innovative ideas, within the timeframe set by the grant provider.
To view a list of the main grant providers, please .
Our end-to-end solution can significantly increase your chance of success. Our experts will identify the right grant for you, write your application and provide assistance with submitting it.
Read our to find out how we have helped clients successfully apply for grant funding.
For more information or to find out how we can help you, please contact our team.
R&D Allowances (RDAs)
Closely connected to claims for R&D Relief are claims for RDAs. These are 100% first year allowances whereby a full tax deduction can be achieved for the cost of capital equipment that is employed by staff intending to carry out R&D.
Our R&D Team is well placed to review these capital costs for our clients as part of their work on R&D Relief.
This is a tax relief initially launched in 2013 that enables companies earning profits from goods and/ or services that have been patented (in either the UK or the European Patent Office) to qualify for a lower tax rate.
Following German objections, the UK Government has recently announced that the relief will be modified with effect from claims submitted after 30 June 2016. The new Patent Box rules, whilst remaining beneficial, are more complicated than the current rules and are unlikely to be as generous particularly given that the intention is to create a closer link between the UK tax relief and the work carried out in the UK – as the current rules are more relaxed on this distinction.
However, it is still possible to elect into the current rules. If the current rules are elected prior to 30 June 2016, the company can remain within the current rules until June 2021. Early election by qualifying companies into the Patent Box is therefore recommended to ensure that the current rules can be accessed until June 2021.
There are crossover linkages with R&D tax relief and we can advise on all aspects.
International aspects of R&D relief
There are over 60 countries worldwide operating a version of R&D Tax Relief within their tax rules. Some operate within the corporate tax rules, others operate within the employment tax rules. Consequently, whilst the taxation and financial rules tend to be driven by the country, there are relatively common rules covering the technological and scientific rules. This is because R&D definitions have largely been driven by the Organisation for Economic Co-operation and Development (OECD). It also means that our engineers and scientists can help any company – no matter where they are based – assess their qualifying projects for R&D purposes.
We work with many companies and within many jurisdictions worldwide assisting with assessments of R&D activity with a view to claiming R&D Tax Reliefs.
The protection of Intellectual Property Rights (IPR) is a major aspect of innovation and technology. As well as working with legal advisers and patent attorneys on traditional protection methodologies such as patents, trademarks, copyrights and design rights, there are also corporate structuring driven protections.
· the use of limited liability companies to protect IPR;
· the separation of IPR from trading companies;
· setting up new group companies to protect IPR;
· setting up companies outside group structures to protect IPR;
· splitting an existing group to separate trading group companies from IPR protection companies.
We work closely with the Corporate Finance team to help clients maximise their business, advising and supporting them every step of the way.
The services we offer include:
· acquisition of shares in a company that is involved in innovation and technology;
· acquisitions of IPR and associated trades;
· disposals of companies, IPR and / or trading activities that are no longer required;
· assisting the Management Buy Out (MBO) of an existing company ownership;
· valuing companies and / or IPR;
· undertaking due diligence to assist the acquisition of companies that are involved in innovation and technology.