Author: Sarah Malter

As we prepare to enter a new year, businesses must take a moment to reflect on the last 12 months as they put plans in place for 2021.

For most businesses, the events of 2020 will have been completely unprecedented and how each company has reacted to this crisis will be unique.

However, out of the panic and strife of the last 12 months, certain things ring true for many businesses regardless of their size or sector.

Our team have taken time to look at the lessons we have learned and the changes within other businesses to create a list of lessons that we feel no business can ignore.

The importance of technology

With millions of people forced to leave their usual workplace and get used to working from home, companies have had to invest millions of pounds in new technology to ensure that it is ‘business as usual’.

Given this surge in investment and a change to the way we work, it is no surprise that around 80 per cent of businesses expect their IT and technology budgets to grow or remain steady in 2021, according to a new study by Spiceworks Ziff Davis.

Of the more than 1,000 businesses surveyed, 76 per cent said they plan on long-term IT changes as a result of COVID-19, while 44 per cent plan to accelerate digital transformation plans.

One of the key trends in technology investment has been the implementation of cloud technology. According to CompTIA’s annual trend list in 2021 ‘Cloud is King’ and it has become a key ingredient in any current IT strategy.

Cloud-based solutions have demonstrated they are secure and enable businesses to work remotely without significant investment in additional infrastructure.

Understandably, many businesses may be concerned about investing in uncertain times, but if the last year has demonstrated anything it is that those that innovate have a higher chance of success.

The value of grants and reliefs 

For many smaller businesses, 2020 may have been one of the first years where they applied for and were successful in getting grants.

In many of these cases, these grants may have been linked directly to Government financial support to help them survive but hopefully it has taught many business owners an important lesson – grants are not to be feared.

At a time when access to traditional forms of lending are limited and businesses are desperate for additional cash, we have also seen an increase in interest in tax reliefs and allowances.

This can particularly be seen in the growing number of R&D tax credits claims from one year to the next, which appears to be rising again in the last tax year, as more than 50,000 businesses seek funding via this resource.

As organisations look to rebuild and recover in the years ahead, many will likely turn again to grants and reliefs as an alternative source of financing their growth – especially if other lenders are less willing to provide funding.

Trusted advisers 

With so many changes in the last year, businesses have had no other option but to call upon professional help.

Top of most businesses help lists has been accountants, who have played a vital role in supporting clients with the various Government schemes, which has helped them gain access to billions of pounds of financial support.

It should come as no surprise then that research from Xero – one of the UK’s leading cloud accountancy platforms – found that most small businesses considered their accountant as an essential part of their business’s continued success.

The study showed that six in ten small businesses relied on their accountant during the pandemic for survival, while 45 per cent of owners said that their accountant is more important to them than ever before.

Highlighting the importance of technology, 63 per cent said that the systems employed by their accountant had been essential, which is why it is not surprising that a third of SMEs revealed that the pandemic led their accountant to adopt new forms of cloud-based technology.

Looking ahead 

Many businesses are now entering a period of recovery and it is clear that owners hope to build more resilient operations for the future.

It seems likely that many companies will now apply the lessons from the last year to their plans, which is likely to mean a greater focus on innovation.

Accountants too will need to invest further in technology to keep up with the expectations of clients in the years ahead.

We are likely to see a growing amount of automation as well, which should make it easier for businesses to seek out new opportunities, like grants and reliefs, by removing much of the burden of preparing claims or managing the day to day operations of their organisation.

Leading R&D tax specialists made.simplr is calling on businesses to accelerate their year-end to help gain immediate access to R&D tax credits to combat cash flow issues.

The business, which has developed an innovative, cloud-based R&D tax credit claim system, says that there are potentially millions of pounds of funding out there for firms via the tax relief.

With many traditional lenders restricting borrowing, business leaders could benefit from bringing forward their year-end date to advance the claim period.

R&D tax credits offer a fantastic opportunity to a wide range of businesses to tap into either cash via a tax credit or benefit from a substantial tax saving. In fact, more than £5.1 billion of support was made available via the scheme in 2017-18, according to the latest HMRC figures.

Sarah Malter, Managing Director at Made.Simplr, said: “Where a business’s year-end has already passed it may just be a simple proposition of obtaining their year-end information on qualifying R&D expenditure so that a claim can be quickly calculated for the potential tax benefit from the previous year.

“In these circumstances, with the right advice and a quick response from HM Revenue & Customs (HMRC), claims can be processed and the benefits received within a very short period.

“However, where a company is only part of the way through its current financial year, matters are a little more complicated.”

Where their year-end is only a few months or weeks away, they should prepare the records required to make a claim, added Sarah, including details of qualifying expenditure for projects they have undertaken during the financial year and submit this information to HMRC at the earliest opportunity.

“Where a business’s year-end is six months or more away and they are in desperate need of funding they could also seek a change of financial year-end,” said Sarah.

“This is quite an involved procedure, which may affect other aspects of their funding, but it could drastically accelerate a claim for expenditure made in the accounting period.”

Made.Simplr says that businesses looking to tap into urgent funding via tax reliefs should speak with their accountant first to make sure it doesn’t affect their business in other ways.

The firm is helping many accountancy firms to speed up their R&D tax credit claims already by using automation via the cloud to collate the information required to prepare an HMRC-ready claim.

Sarah said; “What would have once taken businesses or accountancy firms hours or days to produce, can now be done much quicker by applying the technology we have developed.

“By drastically speeding up the process and making it more efficient we are helping to reduce the cost of providing R&D advice and services for many accountancy firms and allowing them to tap into a wider audience.

“We believe that now is an ideal time for firms to be considering how they market and provide R&D advice to clients, as from our own experience many businesses are currently very eager to make claim and obtain funding that will help their businesses to survive this challenging period.”

A new study from HSBC UK has revealed that SMEs intend to prioritise investment in technology and innovation during the next five years.

The research showed that 67 per cent of UK SMEs expect technology to increase flexible working practices, including the use of new cloud-based platforms.

With many firms having to adjust to remote working during the last six months, many SMEs also see other technological assets, such as video conferencing tools and high-speed internet, as essential elements of their future survival.

The survey also showed that 52 per cent of SMEs expected to make changes to products or services as a result of the pandemic, identifying enhanced online journeys and self-serve capabilities, as key areas of improvement to their operations.

Additional research from HSBC UK, which surveyed business leaders from 49 tech firms, showed that 74 per cent of respondents believe their company will have to work more remotely than before the Covid-19 crisis.

Despite the move to remote working, just one in three believed that productivity levels had suffered due to a move to remote working, with many citing advances and uses of technology as a key driver to change and growth going forward.

Commenting on the results of the studies, Roland Emmans, Head of Technology at HSBC UK Commercial Banking, said: “As firms look to build further resilience, investment in tech is at the forefront of their plans. Business leaders are looking to change their traditional ways of working and find ways that they can innovate to adapt their existing office spaces.

“This reliance on technology has softened the impact of the pandemic on the tech sector and provided growth opportunities for firms that have adapted quickly to provide continuity in their services.”

Made.Simplr is working hard to support businesses with remote working by assisting them to make R&D tax credit claims over the cloud using automation.

In fact, our work is being supported with specialist COVID-19 grant funding from the Government-backed Innovate UK. To find out how we can assist you and your business, book a demo today!

The Government recently published a new R&D Roadmap, which sets out the UK’s vision to cement itself as the best location in the world for scientists, researchers and entrepreneurs.

The Research and Development Roadmap, published at the start of July is part of the Government’s long-term plan to attract the best global talent and cut bureaucracy around innovation and development.

This document is seen as a key cornerstone in the nation’s economic recovery and includes a pledge to spend £300 million on scientific infrastructure across the UK.

The Roadmap also includes support for projects that attempt to address key global and national challenges, such as climate change, quality of life improvement, strengthening national security and enhancing existing public services.

To achieve this, the Government plans to:

• Increase investment in ground-breaking research and cut bureaucracy.
• Establish the Office for Talent, making it easier for top global science, research and innovation talent to come to the UK.
• Create an Innovation Expert Group to review and improve how the government supports research.
• Provide the necessary funding to help entrepreneurs and start-ups scale up their innovations.

Business Secretary, Alok Sharma, said: “The UK has a strong history of turning new ideas into revolutionary technologies – from penicillin to graphene and the world wide web. Our vision builds on these incredible successes to cement Britain’s reputation as a global science superpower.

“The R&D Roadmap sets out our plan to attract global talent, cut unnecessary red tape and ensure our best minds get the support they need to solve the biggest challenges of our time.”