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KEY FACTS – R&D Tax Credit Scheme

GGTC are a GTMA Business Partner & one of the largest handlers of R&D Claims for SME’s in the UK

 

R&D tax credits are considered to be one of the largest single funding mechanism’s provided by Government for investment in business

The Research and Development (R&D) Tax Credit scheme is an EU initiative that is aimed at small and medium sized enterprises (SME’s), and seeks to recover development costs that companies have invested in innovative product and manufacturing processes. The UK also has a large company scheme.

Since the R&D tax credit schemes were launched in 2000-01 up until 2014-15, almost 141,000 claims had been made and more than £14 billion in tax relief claimed.

Over £2.45bn was given back to UK companies in the 2014-2015 tax year; 22,445 companies benefitted in 2014-2015.

Do you qualify? 

  • The R&D Tax Credit Scheme benefits businesses designing, developing and producing new products and manufacturing processes, including in house software development.
  • To qualify you need to be a UK Limited Company that has been in business for at least 12 months and be making PAYE and National Insurance contributions.
  • Do you employ fewer than 500 people? More than 500 qualifies for the large company scheme.

You can claim back two financial years and your current year which could potentially deliver significant and timely cash injection for your business. A claim can then be made every year going forwards.

The average annual claim value is £55,000 pa for SME’s, and for large companies it’s £320,000.

Why do Companies need our service? 

Preparing an R&D claim is not something that can easily be performed solely by the company, or by their accountants in isolation, unlike many other aspects of company tax.

GGTC makes the difference, maximising claim value;

  1. Establish the right project start and finish dates
  2. Include full Project Team members, management, R&D technicians and engineers, production and operations personnel
  3. Financial evaluation that is fully aligned with the R&D activities
  4. Deploy a team of both Technical and Financial Analyst’s reflecting the claim report requirements
  5. Claim activities are effectively co-ordinated and communicated both internally and externally
  6. Liaise with accounting professionals to compile and submit R&D Tax claim
  7. Direct interface with HMRC to resolve queries and enquiries
  8. Adopt a compliant project tracking and reporting process
  9. Future claim opportunities are identified, planned and developed
  10. Claims are fully maximised to recover the highest possible claim payments

Customer R&D Tax Credit Claim Process

  1. Free, no commitment assessment of R&D Tax claim opportunity
  2. Complete technical and financial evaluation once the client is happy to go ahead
  3. Submit claim for filing with HMRC
  4. Claim is filed to HMRC
  5. Respond to any HMRC challenges, queries and inquiries
  1. HMRC issue payment, with average time to cash from filing a successful claim around 42 days. 

KEY FACTS – R&D Tax Credit Scheme

How does the scheme work?

The scheme is based around proving tax relief on the value invested in the development project. This value is calculated by assessing how many people were allocated to the project, how much time they spent on the development and what their sum costs equate to, based on their earnings.

  • Identify all project team members, not just the immediate core team
  • Establish the time each person was involved in the project
  • Based on staff costs for each project member, value the project
  • People x Time x Staff Costs = Project Value
  • Take the Project Value and multiply by the appropriate uplift rate as shown for the SME scheme
  • 125% from 2012, 130% from 2015
  • Equals Total Qualifying Expenditure
  • Total Qualifying Expenditure multiplied by relevant Corporation Tax rate = the R&D Tax Benefit

Qualifying expenditure?

  • Staffing costs;  include all cash sums paid to staff, employers’ Class I NIC and employers’ pension contributions
  • Software & consumable items; relating to development work, including water, fuel and power.
  • Externally provided workers
  • Prototypes and expenditure related to manufacturing trials
  • Clinical trial volunteers
  • Sub contracted developments, although not claimable under the Large Company Scheme
  • Failed projects count towards the scheme
  • You can get a tax refund for each of the past 2 financial years

Losses and small profits?

  • If your company is making losses or paying very little corporation tax, there is the option of using the claim to enhance your losses.
  • If you qualify as an SME, you can surrender the enhanced losses for a cash credit. Broadly speaking, this can produce up to nearly 32% of the R&D expenditure.

Fee Structure;

  1. Free, no commitment assessment of R&D Tax claim opportunity
  2. Success fee of 25% of the claim award made by HMRC
  3. There may be additional claim filing fees charged by the Accountant involved

Customer Meeting Process

  1. Free, no commitment assessment of R&D Tax claim opportunity
  2. Company to sign Non-Disclosure Agreement or NDA
  3. Complete Customer Information Sheet or CIS
  4. Client to Sign ContractSubmit CIS report, signed contracts and NDA to GGTC

For Further Information and an Initial Discussion on R&D TAx Credits please contact admin@gtma.co.uk or call 0121 392 8994

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