Author: Sarah Malter

Your client’s company made a profit in this financial year. Naturally, they are thrilled. However, they spent a great deal on R&D, and the resultant R&D Tax Relief has reduced their corporation tax liability to the point that it looks like they have incurred a loss. While R&D tax credits do not create a true loss, merely a ‘loss’ on paper, if your client is trying to raise capital they may be afraid to claim R&D tax relief. That’s because investors may be more inclined to fund your business if it is showing a profit.

The good news is there are ways to secure funding and raise capital if your client finds themselves in this position.

How R&D tax credits can reduce profit in your accounts.

When businesses make a profit but also spend a lot on R&D work in a given financial year, R&D tax relief can create a loss position for the business. This can happen as a result of the enhancement mechanism present in the SME R&D tax credit scheme. The SME scheme lets companies deduct an extra 130% of their qualifying R&D costs from their yearly profits. It, therefore, has the potential to reduce your client’s corporation tax, thereby making it appear as though they have incurred a loss.

Why might your client care about appearing to be in loss?

There is a marked difference between profitability and profits. A business’s profitability is based largely on the nature of its cash flow in the long term. However, regardless of whether your client has a promising business outlook, profits on their financial statements look good when viewed by third parties. Additionally, profit margins are usually more important when these third parties are considering offering funding, such as grants or loans. One of the main ways businesses raise capital is through a funding round, where independent investors provide funding in exchange for equity in the business. Potential investors will look at various aspects of the business when deciding whether to invest; a solid business plan, a unique idea, an experienced management team, and profitability, to name a few.

Securing funding is often an important element of maintaining positive cash flow in a business. R&D tax credits can serve as a valuable consideration for improving cash flow, both in the short and long term. This is because the SME scheme also allows for companies to claim a cash credit by surrendering their losses. The cash benefit offered, which is 14.5% of the total losses surrendered, can be realised in the short term when compared to the Corporation Tax reduction of the scheme at large. The latter is felt at the end of the given financial year whereas the former aims to be delivered within 28 days of a claim.

Related: How to increase your client’s cash flow with R&D tax credits.

Ultimately, it comes down to a choice between what the immediate need for the business is in that particular financial year – profits or cash flow. A steady flow of capital is essential to sustaining a business, but showing a profit may be key to securing capital funding in the future. What’s best for your client will depend on their situation, so consulting with an R&D tax credit specialist is advisable.

How to raise capital if R&D tax relief puts your client into a loss position

As mentioned, a funding round is a common way businesses go about raising capital. Even if your client is in a ‘loss position’, there are ways to instill confidence in potential investors and raise the capital they need.

• Prepare a thorough business plan. It is important your client clearly demonstrates the need for raising capital and how they intend to spend it. This should include expenditure for at least three years, a detailed financial plan, and even an exit strategy focusing on repayment. Comprehensive record keeping will aid in this process, as well as demonstrate your client’s credibility.
• Consider debt restructuring. Renegotiating the terms around existing debts can lead to an increase in capital. One tool for restructuring is a debt-for-equity swap, whereby creditors accept equity in exchange for a cancellation of all or part of the company’s debt. Similarly, a renegotiation may be made with bondholders for a ‘haircut’, resulting in interest payments or a portion of the debt being written off. Finally, your client may have callable bonds for use when they can’t make interest payments. They can redeem these early in times where interest rates are decreasing.  
• Create a crowdfunding campaign. Crowdfunding refers to raising small amounts of capital from a large pool of individuals. Often, investors who participate in crowdfunding campaigns are less scrupulous in their approach to investing than investors who take a more traditional approach. Furthermore, they may be more likely to make investment decisions based on emotions rather than pure fundamentals. As such, businesses that undertake R&D work that qualifies for tax credits may generate sufficient excitement such that the “paper loss”, as previously described, is less of a concern. Ultimately, connecting with a pool of investors could increase your client’s chance of raising capital. 
• Seek venture capital for the business. Venture capital comes from private investors and is usually given to startups that show promise of long-term growth. Being in a loss position can make it difficult to convince potential investors to invest in your business. However, because your client will not be experiencing an actual business loss, and as R&D often leads to future business improvements, seasoned investors such as Venture Capitalists are likely to identify that and invest based on the long term opportunity the business presents. Once again, a solid business plan, forecasting and growth, and an exit strategy are key to securing capital from this type of investor.

Maximise your client’s benefits with made.simplr

Companies looking to claim R&D tax credits can often benefit from expert advice and consultation. Our expertise, together with our all-in-one R&D tax credits software, is a simple and cost-effective way for accountants to secure the maximum benefit for their clients.

Book a demo today!

A comprehensive, well-prepared, and accurate R&D tax credit claim is critical, not just for maximising your client’s claim but also for avoiding an HMRC enquiry.

R&D tax credit claims are reviewed together with their relevant supporting documentation and, if no further clarification is needed, processed fairly swiftly (usually within 28 days). It is the process of further HMRC clarification that is referred to as an enquiry.

In recent years, HMRC has started to scrutinise the accuracy of R&D tax credit claims in more detail, and enquiries are one of the chief ways they go about determining legitimacy. These tax compliance checks are merely security measures. So if you have nothing to hide, you have nothing to fear.

That being said, dealing with an enquiry from HMRC can cause major disruptions to the day-to-day running of your client’s business. There is also the risk of a reduction in your claim or penalties if the claim contains significant errors, as well as the risk of damaging the relationship your client has with the HMRC. 

Fortunately, enquiries can be easily avoided. Follow the steps below to ensure your client isn’t caught out.

Why HMRC might launch an R&D tax credit enquiry

HMRC generally launches an enquiry when they dispute an R&D tax claim or need clarity on specific aspects. They also launch enquiries as part of their efforts to ensure government funds are distributed fairly. As your client’s accountant, you will be the person HMRC contacts regarding an enquiry.

The following could result in an HMRC enquiry:

• HMRC finds inaccuracies or inconsistencies in the claim. For instance, this could be in the form of missing figures or information which isn’t clearly supported.
• There has been a change in your client’s circumstances that affects the value of their claim.
• HMRC wishes to review your client’s tax return, which also includes a review of their R&D tax credit claim.
• Your client’s company or industry is one that HMRC are particularly interested in. They might want to focus their enquiries on this sector for various reasons.

In addition, HMRC opens enquiries randomly on a percentage of all R&D tax credit claims. This is done to test procedures and check the tax relief schemes are working as intended. As alluded to in the last point, a tax enquiry could be more likely if your client works in a field or industry that HMRC is currently interested in.

The enquiry process

Enquiries are typically launched around 28 days after the submission of an R&D tax credit claim. This is the timeframe HMRC aims to adhere to when reviewing claims. However, enquiries can start months after a claim submission. Your client will most likely receive a letter stating HMRC are performing a compliance check. 

During the course of an enquiry, which can last several months, HMRC could ask to check the following:

• Company tax returns, including your client’s self-assessment tax return.
• Accounts and tax calculations.
• PAYE records and returns for employees.

HMRC might send an inspector to your client’s place of work or ask them to come to HMRC’s offices. You, or a legal adviser, can accompany your client when this happens. Note that a penalty can be expected if your client refuses the visit. The only exceptions being if you’re seriously ill or affected by the death of a loved one.

Potential outcomes of a HMRC enquiry

The outcome of an HMRC enquiry can vary. Here are some of the costly ones to consider:

• If HMRC are not satisfied, they can disqualify certain costs from your client’s claim, thus reducing its value. This can lead to repayments based on funding that was previously given. HMRC’s enquiries can cover material as far back as seven years that relate to an R&D tax credit claim. 
• In the rare circumstances where HMRC believes your client has attempted to subvert and defraud the taxpayer, they will implement penalties. These can be up to 100% of the value of the R&D tax credit claim.
• Diversion of your client’s time and resources to address the enquiry is a third important consideration. HMRC enquiries can take months or even years to be completed. Answering HMRC’s questions may also require your client’s specialist employees, which takes up valuable time. Therefore, even if resolved, the enquiries could incur a high cost in terms of resources.

How to avoid an HMRC enquiry

Businesses can sometimes be put off from claiming R&D tax credits due to the risk posed by the outcomes just outlined. However, by adhering to this simple checklist, you should have no problem avoiding an HMRC enquiry:

• Ensure your technical report demonstrates you understand HMRC’s definition of R&D and outlines how your client’s projects meet it.
• Encourage your client to practise comprehensive, up-to-date record-keeping. Being transparent with company records will help improve the accuracy of your claim and relate it to your client’s R&D costs immediately.
• Identify the staff member who has contributed most to overseeing the R&D work and get them to make the written parts of the accompanying report. Note that this person will not necessarily be in a senior role.
• Ensure the reasoning used within the claim is robust. Why is this R&D work important? Be careful not to stray from HMRC’s definition, though. The staff member you’ve identified (see previous point) can help with this.
• A well-prepared claim will withstand scrutiny and is your best weapon against an HMRC enquiry.

Related: What expenses qualify for R&D tax credit. 

How to respond to an enquiry

Sometimes an HMRC enquiry is unavoidable. If this is the case, there are certain things you and your client can do to ensure the time spent on the enquiry is minimised, while maintaining good relations with HMRC. The latter can help in deterring future enquiries. 

It’s important not to panic. Handling an enquiry might seem daunting, but HMRC aren’t out to trick you. They merely want to ensure the R&D incentive schemes are fair and that the funds are being administered responsibly. So give them as much information as they need for them to do their job. Answer questions as directly and as clearly as possible. In short, a cooperative, professional, and friendly approach is best.

Why made.simplr?

Developed specifically for accountants, made.simplr’s all-in-one R&D software is not only fully compliant with HMRC’s guidelines, but fully automated, intuitive, and integrated with Xero. This means every step of your claim is meticulously planned and prepared, leaving little room for error.

Book a demo today!

Encouraging innovation is the primary purpose of the UK’s Research & Development (R&D) tax relief schemes. This is, in turn, part of the government’s goal of improving UK business productivity, performance, and competitiveness on the international stage. The government’s industrial strategy is to raise levels of R&D investment to be 2.7% of GDP by 2027, which requires increases in both public and private sector investment.

R&D tax relief provides incentives to boost investment in R&D work conducted by companies based in the UK. As a result, the schemes on offer are purposely attractive for innovative businesses across many disciplines. As your client’s accountant, it pays to know how they can benefit from R&D tax relief.

The incentives of R&D tax relief

The government has two schemes to encourage UK businesses to engage in innovative R&D work. The SME R&D tax relief scheme is open to businesses with fewer than 500 employees that have a turnover below €100 million, or a balance sheet worth less than €86 million. Meanwhile, the RDEC R&D tax relief scheme is open to all businesses bigger than this threshold. Both provide benefits in the form of a reduction in Corporation Tax. The maximum benefit that can be claimed through the SME scheme is 33% of the qualifying R&D costs; and through the RDEC scheme, it is 13%.

The SME scheme also includes the option for businesses to surrender their losses to obtain a cash credit. This is valued at 14.5% of the total loss surrendered. Whether or not this is the best course of action for your client will depend on a number of factors, which we discussed in our previous blog about The case for and against your client surrendering their losses for R&D tax credits.

The good news is that your client can still claim tax relief on qualifying R&D work even if the project goal has not been met. This is because HMRC understands that research and development is often a lengthy process and solutions to technical problems are not easily found. As a result, the risk that your client might usually associate with R&D work is lessened by the prospect of R&D tax relief. Risk often arises from the unpredictable nature of R&D work, and the process can spawn ideas that hit roadblocks, which may cost more than anticipated to resolve.

The benefits of R&D tax relief are extremely valuable for businesses as they provide an additional source of funding. Under the SME scheme, the tax reduction occurs below the line in your client’s accounts, whereas under the RDEC scheme, it is taxable income. In the latter case, you can therefore show the credit received as ‘other income’ to increase the value of your client’s profits before tax. This is optional though, so it is worth talking to your client about how they would like their tax credit to be treated.

Qualifying for R&D tax relief

To make R&D work as appealing as possible, HMRC offers R&D tax relief to businesses across all sectors. HMRC’s guidelines for qualifying R&D work reflect this, as they can be applied to all manner of projects. Here are the aspects of R&D work that can secure tax relief:

• It seeks a scientific or technological advance.
• It sought to, or did, overcome an uncertainty (a goal that has so far not been attainable by experts/technology previously developed).
• It contains work that could not easily be done by a professional in the field.

Note that a project can involve developing a process, product, or service that meets these definitions. It can also include modifications or changes made to existing processes, products, or services.  

Related: Most common overlooked expenses when making an R&D tax claim

To be eligible for claiming R&D tax relief, the only requirement is that your client is a limited company based in the UK, which is subject to Corporation Tax.

What does the data say?

UK spending on R&D has been increasing steadily since the introduction of R&D tax credits in 2000, both in terms of the total spent and as a percentage of GDP. According to ONS research, R&D investment in 2000 was 1.59% of GDP and £442.20 per person. In 2019, it was 1.73% of GDP and £576.70 per head. Between 1985 and 2019, there was a 96% overall increase in the total spent. In the Autumn Budget, the chancellor confirmed that the government still aims to increase R&D investment as a percentage of GDP to 2.7% by 2027. 

Related: The Autumn Budget 2021 and what it means for R&D tax credits

The government’s most recent evaluation of the RDEC, published in November 2020, estimates that for every £1 spent on R&D tax credits, between £2.4 – £2.7 is then invested in R&D by UK companies.

According to government statistics, there were just 1,860 total SME claims in the financial year 2000-1. In the period 2019-20, this figure is estimated to be 76,225. The R&D tax relief schemes have come a long way since their introduction. For example, when the SME scheme was first introduced there was a minimum spend of £25,000 per year for each accounting period. Now, there is no minimum spend. Furthermore, HMRC has streamlined their guidelines over time regarding key information, such as their definition of R&D. With the chancellor announcing in the budget that data and cloud computing costs (the tax definition of which has yet to be outlined) will be claimable for R&D tax credits, it would seem the range of qualifying R&D expenditure is likely to expand further in future.

Realise these benefits with made.simplr

made.simplr’s online R&D tax credit management tool helps make the process of completing R&D tax credit claims straightforward. By making the benefits of R&D tax credits more accessible, we hope to aid you in upscaling and increasing the value and efficiency of your clients’ businesses.

Book a demo today!

Chancellor Rishi Sunak announced the UK’s Autumn Budget and Spending Review 2021 on 27 October, which outlined the government’s future economic plans. With the effects of the pandemic continuing to underline much of the government’s spending, it’s not surprising that most of the budget focused on the recovery of the UK economy.

Alongside general economic support measures, the budget also includes significant updates to the UK’s R&D tax credit scheme. These come in the form of greater investment in innovation and more eligible R&D costs. Many of these changes were influenced by the consultation that took place during the Spring Budget 2021.

The changes to the R&D tax credit scheme are:

• The expansion of qualifying expenditure with regards to software. In an effort to support modern research methods, qualifying expenditure will now include cloud computing and data costs, the details of which have not yet been released. This development has been a long time in the making, with the many industries that use cloud-based software calling for an update to HMRC’s policy.  
• Refocusing R&D tax credits to innovation in the UK.Under the current R&D tax credit scheme, companies can claim tax credits on R&D work that is subcontracted worldwide. However, the Chancellor announced that the government will be refocusing reliefs towards innovation in the UK, which could have implications on overseas R&D. While we don’t know what steps the government will take, the aim is to improve skills and knowledge, and encourage investment in the UK. 
• An overall increase in R&D investment: The Chancellor also announced that the government will invest £20 billion in R&D by 2024/25. This idea is to increase R&D expenditure to 1.1% of GDP, which is well above the 2018 Organisation for Economic Co-operation and Development (OECD) average of 0.7%. He maintains this will culminate in the target of £22 billion annual R&D investment by 2026/27. This expenditure does not take into account the amount the government will allocate towards R&D tax relief.  
• An extension of the temporary Annual Investment Allowance of £1m. To stimulate R&D work in the medium term, the Chancellor also announced that the temporary £1m Annual Investment Allowance (AIA) is to be extended to March 2023. The temporary AIA increases the limit from £200,000 to £1,000,000 for expenditure on plant and machinery costs. It was introduced at the start of 2021 and was due to end this December. 

Related: R&D tax credits: A boon for small businesses.

What do these changes mean for the future of UK R&D tax credits?

The budget also included many plans that the government said it would fulfil in relation to R&D tax relief in the years to come. 

As mentioned previously, one of these is an increase in UK R&D investment across the board. According to Oxford Economics, on average every £1 the government spends in public R&D generates £2 of private R&D investment. Through this investment, the government is looking to drive economic growth by allowing forward-thinking businesses to prosper and lead the way. This investment will not only create more jobs in the future, but could also help companies with the high entry costs associated with R&D work, which have traditionally been a deterrent for conducting R&D. Coupled with the financial benefits of R&D tax credits, it’s an exciting time to be involved in the running of innovative businesses that are undertaking groundbreaking R&D projects.  

The budget also confirmed the 25% Corporation Tax rate for companies with profits over £250,000, which will also come into effect from 1 April 2023. Companies claiming under the SME scheme will receive a higher net benefit, while those claiming through the RDEC will experience a slight decrease in net benefit. The degree that the net percentage benefit will change will vary depending on profit levels from company to company. As a majority of UK businesses are SMEs, this is largely a positive change for R&D tax credits.

Another of these plans is to tackle abuse and improve compliance within the R&D tax credit scheme. This policy aims to ensure that the benefit of R&D tax relief goes to those that deserve it.

What does this mean for your clients’ R&D Tax Credits Claim?

The Finance Bill 2022-3 will be the next opportunity to legislate these plans, which will only take effect thereafter. This means, right now, it is unclear exactly how the government will implement these changes and how they will directly affect your clients’ R&D tax credit claim.  

We do know, though, that these changes are due to come into effect in April 2023, and since HMRC allows work to be included in a claim up to two years after the business’ accounting period, the R&D work your client is doing right now will be eligible for when the changes come into effect. So it’s worth preparing your client’s claim ahead of time. This is particularly relevant for R&D work done by your client outside of the UK, because, as mentioned above, HMRC is due to change their policy as part of efforts to refocus UK R&D. 

In time, HMRC will outline exactly what new types of R&D work will be able to qualify for R&D tax credits so be sure to follow our blog for updates. A reminder that the project needs to have been undertaken within two years of the end of your client’s last accounting period. This specifically applies to companies working with cloud computing projects or projects centred around data. If any of your clients are conducting work in these areas, now is the time to start investigating if they are eligible to claim R&D tax relief.

While we might not know the details of how these changes will play out, it is clear that the R&D tax credit scheme will continue to support innovation, and these tabled changes will lead to more innovation, more skilled people, and a boost for the UK economy as a whole, which is altogether great news for your clients. 

Related: Expert tips for maximising your client’s R&D tax credit claim.

Let the experts at made.simplr help

With made.simplr, completing your client’s R&D tax credit claim is simple and stress-free with our easy-to-use tax credit claim software. Our software will incorporate all the changes to UK R&D tax relief when they occur, so any uncertainty you might have as to whether your client;s claim is affected or not is mitigated. made.simplr integrates with the Xero accounting platform, which aids in the accuracy of your submitted figures. We also help you ensure your client’s claim doesn’t miss out on any qualifying expenditures, thereby maximising their R&D tax benefit.

Get in touch and book a demo today.

A new report released by the Government has set out a strategy that attempts to harness and achieve better value from £104 billion worth of innovation and knowledge assets within central Government

The recently released Mackintosh Report covers a wide gambit of innovations developed by the Government and its partners, including many of the UK’s leading academic and research institutions.

The report states: “The UK’s public sector is a remarkable source of innovation. It is bursting with potential, and rich with ideas and insights that could help to shape the future of our country as we emerge from the coronavirus pandemic.

“However, we need to manage these so-called ‘knowledge assets’ wisely. Only by investing in them properly – giving them the attention and resources they need – will they deliver the enormous benefits they offer to our economy and society, boosting productivity and improving the quality of life in the UK.”

According to the report, up to £104 billion of knowledge assets are held by central Government, which currently achieve little value beyond their intended purpose.

Under the report’s strategy, the first step is to establish and share good practice for knowledge asset management within the public sector, which will include new guidance for organisations on how to “identity, manage and derive maximum value from public sector knowledge assets”.

Following on from this, the Government will establish a new knowledge and innovation assets bank, which will “share intelligence on high potential opportunities across government, allowing knowledge asset holders and innovators to connect and pursue opportunities”.

To assist with the creation of this bank a new department will be created, called the Government Office for Technology Transfer, which will work with the public sector to identify promising knowledge asset opportunities and offer specialist support.

The idea of utilising knowledge assets within government was first suggested in a report published alongside the 2018 Budget, and this latest report follows on from that original idea.

“Underpinning this implementation strategy is a vision where public sector organisations use the knowledge, skills and capabilities they develop while fulfilling their public purpose to have broader applicability and impact, thereby catalysing innovation, driving productivity and growth, and improving public services and finances,” said the report.

This latest strategy is part of a wider campaign within Whitehall to improve the use of public and private research and development to boost the economy as it emerges out of the pandemic.

At the heart of support for the private sector remains the UK’s generous R&D tax credit system, which continues to support innovation across the country.

At Made.Simplr, we have developed an innovative cloud-based solution designed to help accountancy firms and businesses automate R&D tax credit claims. To find out more about our systems arrange a demo by clicking here.

The Government has announced an investment in five aerospace projects to boost the creation of jobs and new innovations.

The new project will look to revolutionise aerospace manufacturing in the UK by supporting state-of-the-art technology, including 3D printing machines, which the Government hopes will revitalise the hard-hit industry.

The multi-million-pound investment in aerospace manufacturing was announced by Business Minister Paul Scully, who said that the money would look to improve manufacturing within the aerospace industry, developing technology to make production lines “quicker, more efficient and cost-effective”.

“This multi-million-pound cash injection will safeguard vital jobs and support the aerospace sector as it builds back stronger after the pandemic,” he added.

“Manufacturing is at the very heart of UK industry, and innovative processes will ensure that the UK is at the forefront of global efforts as we develop technology that can power a green aviation revolution.”

The funding will focus on proposals to create lightweight materials and parts that will reduce how much fuel is used and that can be adopted onto future hybrid and electric planes.

It is hoped that the aerospace industry can rebuild itself and create a greener future as it innovates and adapts to more sustainable travel requirements over the next few decades.

Projects receiving funding include:

• GKN Aerospace-led ASCEND – A project seeking to develop and accelerate new lightweight, composite technology and improve supply chains for more sustainable future mobility solutions.
• Renishaw-led LAMDA – Developing a 3D metal printing machine to mass-produce smaller components for aircraft.
• Q5D-led LiveWire – A project that will create a machine that can automate the manufacture of wiring and embed it into aircraft parts components.

Aviation Minister Robert Courts added that “the Government will help advance the UK’s future transport system through its extensive R&D Roadmap and to increase R&D public spending to £22 billion per year by 2024/5.”

If you or a client are investing in R&D, whether in the aerospace sector or beyond, our automated R&D tax credit claim system could help you save time and money. To find out more, book a demo with our team now.

 

The Department for Transport (DfT) has announced a new £20 million funding initiative to support innovative ideas for zero-emission vehicles in the UK.

The DfT is due to launch a new research and development (R&D) competition in the field of e-mobility, to help “some of the most promising electric vehicle technology innovations”.

This competition will help to fund zero-emission emergency vehicles, charging technology and electric vehicle (EV) battery recycling projects, according to the DfT.

Around £18 million of the funding will come from the Office for Low Emission Vehicles, while a further £2 million will be provided from other Government funds to support outside investment in green technologies.
Part of this funding has already been ringfenced for The Niche Vehicle Network, an independent association of more than 900 niche vehicle manufacturers and engineering companies, promoting research into low-carbon technology. Transport secretary, Grant Shapps, said: “The funding announced will help harness some of the brightest talent in the UK tech industry, encouraging businesses to become global leaders in EV innovation, creating jobs and accelerating us towards our net-zero ambitions.”

The latest funding follows news of a “suite of innovation funding competitions backed by a combined £92m of investment to support energy storage, floating offshore wind power, and sustainable biomass production projects” that was announced in the Budget earlier this month.

The latest funding pot is part of the Government’s ambition to phase out all sales of new fossil-fuelled and hybrid cars within the next decade.

As well as benefitting from direct grant funding from this new scheme, many of these innovative businesses may be able to access the UK’s generous R&D tax credit.

If you would like to find out how our automated claims solution could help you or your clients make the most of these reliefs – which offer up to 33p for every £1 of qualifying expenditure – please arrange a demo with our team today.

 

New analysis of HM Revenue & Customs (HMRC) latest R&D tax credit data shows that the UK’s construction sector accounted for just under six per cent of the UK’s R&D tax credit claims.

With many innovations coming out of this important industry, experts feel that there could be greater potential for some companies to make a claim.

In fact, the data shows that for those that did make a claim from the sector as a whole, the average value of a claim was just over £70,000.

The reason for so few claims in the sector may be down to ongoing misconceptions about R&D tax credits only suiting the most high-tech industries, however, this couldn’t be further from the truth, with funding provided to almost every sector in the country.

HMRC defines innovation eligible for an R&D tax credit claim as any project that overcomes an uncertainty – something that could not easily be worked out by someone who is a professional in the field – and delivers a new scientific or technological advancement.

Even if the innovation ultimately fails, the work conducted and expenditure incurred could still be eligible for tax savings under the scheme.

Within claims for the construction sector, a business could claim against staff costs, subcontractors, externally provided work, software and consumables like heat, light and power.

If you operate in the construction sector or have clients that do, who may benefit from making a claim on R&D projects, which could include new construction techniques, materials or advancement in green technology, then our automated claims software could help.

Using the immense power of the cloud, Made.Simplr can work alongside existing online accounting platforms like Xero to make the claims process simpler, quicker and more cost-effective.

To find out how our systems can assist you, please arrange a demo with our team today by clicking here.

In January 2021, the Government announced they are investing £213 million into UK science, under their flagship Research and Development (R&D) Roadmap, which aims to make the UK the best place globally for scientists and researchers to live and work.

This shared funding will upgrade the UK’s scientific infrastructure, enabling researchers in science facilities to respond to worldwide challenges such as Covid-19 and climate change.

Leading scientists, research institutes, and universities are among those that will benefit from £27 million (from the £213 million funding) to upgrade or purchase brand-new vital supplies, to drive outstanding research.

Which cities and institutes will receive the funding?

The Capability for Collections Fund (CapCo) will benefit from £15 million to renew struggling research institutions across the UK, including those within archives, galleries, libraries and museums. This funding aims to conserve the UK’s heritage whilst modernising these spaces for local communities and generations.

Medical Research Centres based in Dundee, Edinburgh and Glasgow will share £2.8 million worth of the funding to purchase advanced specialist equipment and technology to support Covid-19, human genomics, long-term programmes in cell biology and more extensive virology research.

With this funding, researchers will be a step further in detecting and modelling diseases in more detail than before, contributing to the UK’s response to the current and future pandemics, plus cancer, dementia and other global diseases.

The Science and Technology Facilities Council (STFC) will receive £30 million worth of funding in total. £20 million to improve campus infrastructure at its sites in Edinburgh, Liverpool City Region, North Yorkshire and Oxford, enabling further development of flagships projects, such as pre-launch satellite testing to search for dark matter.

They will receive £10 million to upgrade laboratories which support scientific activity across Edinburgh, Liverpool, North Yorkshire and Oxford, including projects in artificial intelligence, pre-launch satellite testing and quantum physics.

The University of Essex will also get support for its wide-scale survey, to discover how covid-19 has affected family relationships and home-schooling.

Additionally, £34 million will go towards developing the UK’s digital research capabilities, plus £1 million for new hardware in urban data centres in Glasgow, Liverpool and Oxford.

The Government hopes that this funding will maintain UK scientists, whilst attracting other international talents.

Amanda Solloway, the UK’s Science Minister, states that

The response from UK scientists and researchers to Coronavirus has been nothing short of phenomenal.

We need to match this excellence by ensuring scientific facilities are truly world-class, so scientists can continue carrying out life-changing research for years to come.

If you are conducting innovative projects related to science or technology within your company, you could benefit from R&D tax credits. To find out more, book a demo with our team now.

 

In the 2020 Budget, £10 million of funding was allocated to Research and Development (R&D) to help internationally-known distilleries in the UK go green by switching to low carbon fuel.

The ‘green industrial revolution’ is in its initial funding phase to ensure carbon emissions decrease, and new green jobs receive the necessary support.

With the Government funding, UK distilleries can switch to alternative energy sources, such as biomass, low-carbon hydrogen and repurposed waste to power their operations, ultimately cutting nearly a million tonnes of CO2 every year. This amount is equivalent to removing 200,000 cars from the road.

In total, six distilleries in England, and seven it Scotland, can now start their sustainable innovations with funding of between £44,000 and £75,000, in the first phase.

Additionally, utilising these alternative fuels and energy sources enables decarbonisation R&D to increase. Already the use of biofuel and hydrogen boilers, along with geothermal energy, are in its production process.

Director of Industry at the Scotch Whisky Association, Dagmar Droogsma, believes that “the Green Distilleries Fund is an important step in the industry’s journey towards net-zero.

“It will help the industry test new technologies, like hydrogen, which can be rolled out at scale in future years and enable Scotch Whisky to further drive down emissions and protect the natural environment.”

For more information or guidance regarding R&D funding, book a demo today.