Research & Development Tax Incentives

Cashing in on Research & Development (R&D). Companies are reducing their tax and claiming cash from HMRC.

A simple equation:

research and development + claim = cash from HMRC.

Why make a claim

Companies are receiving payments from HMRC: up to £33.35 for every £100 of Research and Development spend.

  • For a profitable company: to reduce its corporation tax bill
  • For a loss-making company: to claim cash from HMRC
  • To improve the company's cashflow
  • To make the company's balance sheet look healthier
  • To increase the company's reserves


Who can claim

Technology
Manufacturing
Healthcare and Biotech
Property, construction and engineering
Professional Practices
Technology
Manufacturing
Healthcare and Biotech
Property, construction and engineering
Professional Practices

Any companies can qualify if you are:

Product   Coins     Cog
Developing new or improved products or processes.   Investing in technology, including the development of new or improved software when used:    Investing in software to make your business run more efficiently.
  • Manufacturing: both products and processes.
  • Food and drink: products and processes.
  • Audio visual and sensory related technologies.
  • Property, construction and engineering.
 
  • for sale or licencing
  • as part of a product, process or device.

Examples:

  • Development of apps, tools and platforms.
  • Data analytics e.g. in the medical and financial sensory etc.
  • Data security/E-learning.
 

Examples:

  • development of a new improved client relationship management system (CRM)
  • development of a new or improved document management system (DMS).
  • improved stock control system
  • Improved warehousing system.

How we can help

  • Help you to identify R&D projects.
  • Prepare your R&D claims.
  • Deal with HMRC queries.
  • Review and replace your previously understated claims.
  • Help with setting up internal procedures to capture R&D data.
  • Help maximise the benefit from R&D tax losses.
People discusiing

Case studies

Software development

An independent payment processing company invested significantly in the research, design and development of its own innovative payment processing products, which included a range of additional and beneficial features which were unique to the marketplace.

We identified a number of areas of R&D. These included:

  • The development of a platform to provide the company and their customers with unique payment management and reporting tools
  • A bespoke modular payment application
  • The development of software and configuration download technology enabling uninterrupted use of the terminal
  • The development of physical demand interrogation software which draws conclusions about the device’s likely condition – a first in this marketplace

Tax benefit

The R&D claim resulted in a cash repayment from HMRC of £341,000.

New product and software development 

The company is a world leader in providing oxygen-enhanced MRI (OE-MRI). OE-MRI is a non-invasive and non-ionising imaging method that provides information on lung disease status and tissue oxygenation.

We identified a number of areas of R&D. These included:

  • The development of a platform, to analyse MRI scans of the lung in order to assist in the diagnosis and treatment of conditions
  • The development of novel MRI acquisition and associated analysis methods
  • The development of medical device software tools
  • Improvement of modelling techniques to generate quantitative imaging biomarkers

Tax benefit

The R&D claim resulted in a cash repayment from HMRC of £132,000.

Development of a new product

The company invested in the development of digital media displays for taxis in the form of the roof-mounted pods. The aim was to develop a technology that could provide remotely updated, location specific digital advertising display messages.

We identified a number of areas of R&D. These included:

  • The development of a readable screen, in terms of brightness and definition, that would work in all ambient temperatures and environments and be powered from a car battery
  • The building of a bespoke thermal management system to control the heat build-up in the pods in hot weather
  • To develop an anti-vibration system to protect the components from the vibration when driving over speed bumps and pot holes
  • The development of software to change the display according to the specific location of the vehicle

Tax benefit

The R&D claim resulted in a cash repayment from HMRC of £85,000.

Improved manufacturing process

The company is a manufacturer of scientific equipment and laboratory consumables. In addition to creating new products they have sought to improve their existing range of products and manufacturing processes.

We identified a number of areas of R&D. These included:

  • New and improved heating and control technologies
  • The design and development of a product that would not rust
  • Improvements to existing products including simplification to improve reliability and reduce the component count.

Tax Benefit

The R&D claim resulting in a cash tax saving of £58,000 over two years.

Improving the technical capabilities of satellites

The company is an independent research, innovation and technology company that drives innovation through the use of satellite. The company sought to manipulate and utilise data and imagery from satellites in a number of different ways on a large number of projects.

We identified a number of areas of R&D. These included:

  • Big data analysis and visualisation of satellite data to tackle the problem of illegal fishing
  • Solving communication problems in higher latitudes of the Earth
  • The creation of a platform that can provide data, information and tools to enable iceberg monitoring
  • Utilisation of next generation web technologies, to enable analysis of satellite Earth observation data that enables more targeted and specific responses to natural disasters, such as earthquakes.

Tax benefit

The R&D claim resulting in a cash repayment from HMRC of £200,000 R&D expenditure credits.

Professional practices investing in their business

A professional practice, who having experienced significant growth in its business, sought a more efficient way of working. The firms work is complicated but also process driven. Having assessed the market for an ‘off the shelf’ solution, it was apparent that none of the available software packages had the capability to create personalised working practices in an electronic environment that encompassed all of the required enhancements. As a result, the Company undertook a large scale, complicated internal project to develop software to create electronic workflows, replacing the previously largely paper based system.

The project was costly as it required the company to invest in a significant number of man-hours. With limited funding available to the company, they sought access to R&D tax benefits to subsidise the cost of the project conducted by a subsidiary company to be within the R&D tax relief regime.

We identified a number of aspects of the development project on which R&D tax benefits could be claimed and we then helped them prepare their R&D claim.

To date the firm has received £187,000 of R&D tax credits from HMRC, with an estimated additional £60,000 due in respect of the final phase of the project.

Contact us

Caroline Hunt
Caroline Hunt
Director, Corporate Tax
London