The complex landscape of R&D tax credits

The UK’s R&D Tax Credit scheme is one of the most attractive in the world, allowing companies to claim retrospectively for up to two previous accounting years.

It encourages and rewards both SMEs and large companies for investing in innovation, offering a vital means to cut costs and improve cash flow, whilst keeping ahead of the competition.

The scheme is one of the most attractive in the world and a company can claim retrospectively for up to 2 previous accounting years and yet, despite that, many companies either fail to identify that they can claim or under claim.

A webinar from MSC R&D, one of the UK’s most successful tax credit partners for technology-based businesses, aims to help companies make successful, fully maximised R&D claims.

As well as tax credits the webinar will also look at Research and Development Allowances, known as RDAs and Patent Box.

RDAs are allowances for R&D carried out by trading companies, individuals and partnerships, providing separate reliefs for capital or revenue R&D expenditure.

Patent Box is a tax incentive aimed at getting companies to start thinking about protecting their Intellectual Property, right from the start of a business venture.

It can be strategically very important, opening up major opportunities in terms of licensing and even funding for R&D.

“It can be a complex journey,” says MSC R&D Marketing Manager Iain Gray, “in a landscape that’s often difficult to navigate.

“In this webinar we’re going to look at how businesses that have never made a claim might do so and how those that have previously made claims might fare even better.

“And, equally important, we’ll also examine what the alternatives are in terms of support for a successful claim.”

Gray points out that any limited company developing new products, technology or processes may be eligible.

“It is a tax relief scheme designed as an incentive for companies developing new technology – the more qualifying development work a company does, the greater the relief it can get from its Corporation Tax bill.

“Even loss-making companies can benefit, which can be of particular importance to early stage businesses,” he explains.

The benefits vary according to the level and cost of development undertaken, whether it is an SME or a large company, and the company’s Corporation Tax band.

But it’s not unusual for claimed expenditure to run into hundreds of thousands of pounds, with tax relief of more than £30,000 being realised.

Gray adds: “There tends to be an automatic assumption by many companies that R&D Tax Credit claims are best handled by their accountant, who can do the numbers while they provide the technical input.

“But, importantly but not widely appreciated, as well as the technical knowledge that’s required, an in-depth understanding of what potential R&D activity may or may not fit within the context of the scheme legislation is also needed.

“That understanding comes with experience of many, many claims across a broad cross section of sectors.”

He says claims prepared without this expertise can often result in a lot of the work having to be undertaken by the company, rather than its advisor. The resulting claim may be limited, inaccurate or non-compliant in its findings,

“And all that might be followed by a hefty bill from the advisor.

We take it to a new level, matching the right technical and financial expertise to a specific business, to achieve the maximum eligible benefit from the R&D Tax Credit scheme, whilst minimising time commitment and financial risk.

Operating on a contingency basis, with no set up fees, MSC R&D has been successfully preparing R&D Tax Credit claims since the scheme’s inception in 2000.

To register for the webinar on September 26 at 2pm click here

For more information on MSC R&D’s services visit www.mscrnd.com