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Figures reveal Northern Businesses are overlooking valuable R&D Tax Credits

New official stats show that an abundance of Northern SMEs could be claiming R&D tax credits, with an average benefit of over £50k

Running an SME can be hard at the best of times. Small business owners have to handle an array of challenges including selling, delivering, financing, managing and growing their brain-child with little or no staff, while trying to make it a success all at the same time.

It is, therefore, a very pleasant surprise to any SME owner when an unexpected advantage comes along. The latest advantage comes in the form of R&D tax credits.

R&D tax credits were created in 2000 by the Government as an incentive for companies to invest in Research & Development. A staggering £21.4bn has been claimed in tax relief since then, in the form of 240,000 claims.

This, however, is only scratching the R&D tax credit surface, as a new Government report has revealed that thousands of Northern England SMEs are eligible for tax relief and are still missing out.

The R&D Tax Credits Statistics

Statistics released a fortnight ago show that £350m of R&D tax relief was claimed by northern companies during the 2016-17 fiscal year. This represents a 19% increase in the previous year, indicating that companies are beginning to understand the tax relief a little better.

The Number of Claims – UK-wide

So far there have been 39,960 claims for 2016-17, of which 34,060 are in the SME scheme. The number of claims has plateaued from the previous year, but the figures are still incomplete.

It is estimated that claims for 2016-17 will increase once the all of the data has been compiled, meaning it will be the highest since the tax relief began.

The figures clearly show that the number of claims has steadily grown over the past 17 years, with an SME’s claim valuing almost £54,000 on average – an amount which would be invaluable to any business.

The Total Money Claimed – UK-wide

In all, Government stats show that, so far, £3.5bn of R&D tax relief support has been claimed for 2016-17.

It is estimated, with data revisions, that this will rise to the highest total the tax relief has seen in its eighteen years.

Regional R&D Tax Credit Statistics

In relation to Northern SMEs, there were a total of 7,305 claims, with a total value of £300m.

*Numbers: actual
*Amounts: £ million

The figures show that many, many more SMEs in the North West, North East and Yorkshire & Humber could be claiming R&D Tax Credit.

What’s the catch with R&D Tax Credits?

There are many SMEs missing out on RD tax credits for a number of reasons. Many northern SME business owners are simply unaware of the tax relief, owing to lack of advertisement and promotion.

Some are underclaiming due to a lack of comprehensive understanding about some of the subtle details of the R&D guidelines. In addition to this, some SME owners believe R&D Tax Credits are only available for traditional research sectors.

Many SME owners that we have come across simply think it is too good to be true, and there must be a catch. This is leading to many company owners missing out on this legitimate financial reward for their valuable investment within their industry. The Government itself says of R&D Tax Credits:

R&D tax credits are a tax relief designed to encourage greater R&D spending, leading in turn to greater investment in innovation. They work by either reducing a company’s liability to corporation tax or by making a payment to the company.

Samantha Holloway, CEO of rdtaxcredit.org.uk, commented:

We are speaking to lots of local small and medium-sized enterprises who are not aware of the money that they are owed.
The statistics show that less than five percent of SMEs that are potentially eligible to claim R&D tax credits have not made a claim.
We are looking to remedy this by educating businesses, and guiding them through the claims process, step by step.

How can rdtaxcredit.org.uk help?

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

We also provide extensive information on our website should you wish to research R&D Tax Credits in further detail. We have information relating to individual industries such as:

If you would like to contact one of our experts for free initial advice, complete the quick enquiry form to receive a no-obligation review of your R & D Tax Relief claim.

Images sourced from:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/742661/Research_and_Development_Tax_Credits_Statistics_September_2018.pdf

October 25, 2018/0 Comments/by admin

R&D Tax Credits For Medical 3D Printing Companies

Medical Sector

With the advancement of 3D printing technology, inventors are able to manufacture medical devices to be used in the human body. Processes like these are submittable in an R&D Tax Credits claim.

Conventional medical technologies can no longer keep up with the pace of 3D printing innovations. This industry can now create complex geometries within printed medical devices which are fully customisable to suit the patient.

The 3D printing industry is expected to grow in excess of 25% over the next five years and will become an impressive £2 billion industry by 2020. Companies within this sector should now look to engage with a specialist R&D Tax Credits advisor to ensure they obtain the full relief possible to aid further growth. Eligible processes must meet the criteria below:

New or improved products, processes, or software
Technological in nature
Elimination of uncertainty
Process of experimentation

Eligible costs include but are not limited to:

costs associated with developing a patent
employee wages
cost of testing
cost of supplies
contract research expenses

Advances in 3D Printing

Historically, the medical industry has utilised material technology for implants involving ceramic and metals. Although advancements are still being made using the older technology, it has limits when you consider the efficiency of the medical implant or device.

Typically, the dilemma is to either mass produce an implant with the ‘one size fits all’ approach which has health complications for the patient. Or create a custom implant, but due to the costs, not everyone will be in a position to be able to benefit from a bespoke service.

With 3D printing however, medical professionals can now offer a custom implant or medical device at a much reduced cost. It is revolutionising the industry.

Advancements in material technology allow 3D printing using materials such as cobalt, titanium, composites, chromium, stainless steel and other metals. An advantage also comes in the form of performance, outlasting implants using the traditional methods.

The process for creating 3D printed implants starts with CAD (computer Aided Designs) drawings or MRI (Magnetic Resonance Image) and gives the finished products a more natural anatomical geometry.

This new technology is also being advanced in the areas of bone replacement and scaffolds that help the human body produce natural bone growth. This improves the stability of the implant long term.

There are still challenges with 3D printing but it is undoubtedly improving the quality of medical devices, The advantage of using 3D printing to create medical devices is the ability to customise the device to meet the patient’s specific needs; however this is also one of the biggest hurdles in standardising a manufacturing process. It is not a one size fits all scenario. When printing companies produce these medical devices, there is also a requirement to ensure that the device meets all safety standards.

When it comes to medical devices, biocompatibility is a primary concern that needs to be addressed. Companies which develop medical devices must conduct extensive testing on other products if biocompatibility information is not available for a particular material. There are many initiatives underway, such as the Biocompatibility Consortium for Additive Manufacturing, an initiative which aims to analyse biocompatibility of different materials.

Example 1 – 3D Printed Hearts

Such is the advancement in 3D printing that recently scientists in Switzerland were able to produce an artificial human heart made of silicone. As there are around 26 million people who suffer from heart failure around the world, the ability to produce an artificial beating heart would have huge benefit within the healthcare industry. Further research is currently ongoing as the silicone material used in this experiment began to break down after an hour. However, the experiment does show that with the correct materials this will be a possibility in the not too distant future. It is almost certain that 3D printing will play a large role in the future development of artificial hearts.

Example 2 – Metal Printing Implants

Previously, implants needed to be attached to bone using a special cement but nowadays 3D printed implants give the opportunity to attach without any cement. It is possible that the implants could be printed with a textured surface surface which in time would allow bone ingrowth to support and connect with the implant.

At the moment, it is plastic and metal based devices which are used for these kind of implants. Both of these materials have issues that prevent the procedure from being as effective as it should be. The metal devices are very dense and therefore it is difficult to observe how well the bone is forming around the implant. Plastic alternatives are less dense but then this means that they lack strength to support the load and it is difficult for bone to form around this material. Research is ongoing to find a better suited material to be used for these implants.

Example 3 – 3D Printed Pacemakers

Pacemakers are a device which helps people with irregular heartbeats to control and monitor their heart rate. Electrodes are used to detect the electrical activity of the heart, which send the data via wires to the computer. When the data is assessed the computer will tell the generator to send electrical impulses to the patients heart in order to correct the heartbeat. There has been such advancement in biomedical science that 3D printers are now being used to develop pacemakers. Currently, pacemakers are a one-size-fits-all device but soon 3D printing will be used to develop a personalised pacemaker designed to correct an individual’s unique heart problems.

Summary

3D printing gives the health sector the ability to offer patients a better quality of care and is bringing down the costs and wait time. It is saving lives!

This technology can help manufacture bio-inert elements of the human body.

Companies engaging in sectors that utilise 3D printing are able to offset certain R & D costs from their tax returns, resulting in tax savings or even money back.

If you’re one of these companies, speak to an advisor today at RDTaxCredit.org.uk and receive a no-obligation R&D Tax Credits review. Click here to make an enquiry.

September 30, 2018/0 Comments/by admin

How Much Did You Pay for Help with Your R&D Tax Credit Claim?

R & D Tax Credit

If you are already claiming R&D Tax Credits, you should review your costs of making a claim periodically, since markets change and you may be paying too much in fees to one of the R&D Tax Credit specialist consultancies.

Usually the most important factor for a business is to understand the scope of what can be claimed in terms of eligible tax credit projects and then writing a technical justification to support your claim for R&D Tax Credits.

An R&D tax credit claim can include advances in science and technology to do things like…

Create a new product
Develop a new service
Design a new process such as to improve organisational efficiency
Adapting and developing existing software to create new ways of doing things
Building complex websites or web based applications
Integrating different technology platforms or devices involving complex systems integration
Creating innovative new software applications involving technology development
Designing or redesigning products or elements of a product – involving the innovative use of science or technology. This could be a new handle or a better lock or more efficient cleaning process so long as science or technology is used in an innovative way.

It can also include things like using science or technology in new and innovative ways to develop new ways to make and bake better pies or bread.

The government has produced a great informative pdf here. Well worth a read.

If you seek help or advice from a specialist you are likely to increase the value of your claim as evidence seems to suggest that many companies’ under-claim or worse still don’t claim at all because they have difficulty interpreting and applying the guidelines.

The technical justification needs to identify what projects come within the scope of R&D for Tax Credit purposes and explain in plain English why those projects fit into the guidelines for eligible projects.

In our experience there is no need for the R&D Tax Credit adviser to take on the role of submitting the Corporation Tax Computations which is what some specialist consultancies want to do.

We believe a better approach is for the R&D adviser to work with your existing accountants to support them and your finance manager in identifying eligible spend categories and in understanding what spend qualifies.

Whatever you are paying we can help you to review your expenditure to minimise the cost of making a claim, and if you think you may have overpaid we would like to hear from you.

August 2, 2018/0 Comments/by admin