Neil Allcroft, Senior Tax Manager and R&D specialist at HB&O, began by busting the myths related to R&D claims and making it clear that this is not a relief dedicated to ‘white coat research’. Neil provided clear guidance on the breadth of activities that could be considered for a claim, and answered questions about the impact of funding, failure and profits on a potential claim.
Neil Allcroft said: “Businesses often think that they can’t claim if they’ve been paid to do the work, or if they’ve failed to achieve what they were seeking to achieve. That’s simply not the case. And companies don’t have to be profitable to claim either – but they must be a going concern.”
R&D activities that businesses are undertaking all contribute to a successful claim. Direct activities can include design, production and testing, while indirect activities such as training and research also can form part of the claim.
Neil also explained the differences between the SME scheme and the Large Company scheme and clarified the different ways in which reliefs could be applied to benefit a company, including as a cash injection (tax credit), tax loss or reduction in corporation tax.
Sarah Windrum, CEO of The Emerald Group and sponsor of Tech Central shared details of a recent visit to No. 10 with the Federation of Small Businesses, where the lack of take up in R&D tax credits among small businesses was one of the items discussed.
“The lack of take up surrounding this type of tax relief appears to be linked with the lack of available information and knowledge of how to claim. Businesses make assumptions about what they think is likely to constitute R&D in relation to HMRC relief and can wrongly assume they won’t have grounds for a successful claim. From my own experience, I’m aware that there are businesses out there who think they may be eligible but are put off by what appears to be a very technical and complicated relief” Sarah explained.
Neil Allcroft said: “Although this relief is complex, if you work with a specialist to make the claim, the burden on the business itself is very small, but the potential benefits can be significant. The average small business claim is £60,000 in relief but many are much higher.
“Any business that believes it is making an advance in science or technology – or using science and technology to facilitate an advance – should start thinking about a claim. We’re always happy to have an initial scoping conversation free of charge with businesses to help identify whether there’s a claim worth pursuing.”
The event, kindly hosted by Coventry University at their Simulation Centre, included a tour of the facilities at the venue where guests were shown the cutting edge immersive technology designed to help organisations train and develop their staff. Paul Fairburn, Director of Enterprise & Innovation at Coventry University, also explained the university’s role in promoting leading edge research and education across healthcare, manufacturing, automotive and other industries.
For further R&D advice, contact Neil Allcroft 01926 422292
