A quick definition: The Research and Development Tax Relief Scheme
The Research and Development (R&D) Tax Relief Scheme was set up in 2000 by the UK government to encourage innovation within the science and technology sectors. The scheme essentially offers businesses a financial incentive through either direct corporation tax savings or redeemable tax credits on several of the costs necessary to the completion of their innovative projects.
There are lots of costs that can be included in a claim, some of which are:
Consumable materials and prototypes
Heating costs, lighting costs, and other power costs
External workers eg. agency staff, third party staff
Payments to Third Parties - Subcontracted R&D.
Creative Tech: How Brighton has become a creative tech cluster
According to Technation in 2017, Brighton now has 12,614 digital jobs and generates an enormous £580 million to the economy. Furthermore, Technation has predicted that Brighton’s digital sector has a 92% growth potential.
The fact that Brighton is a digital cluster means that it is a focal point for the industry nationwide. The flocking web developers, app developers, computer game developers and other digital creatives have brought a significant amount of investment with them, and the industry has great potential for R&D Tax Relief claims. We are now witnessing the expansion of the bubble into Eastbourne and Hastings.
What does this mean in terms of Research and Development Tax Relief?
Well, if you’re a creative tech business you could be eligible to claim back Research and Development Tax Relief back on your projects. If you are an investor in one, then you should be making sure that the directors are making your funds go further by claiming.
The aim of the R&D Tax Relief Scheme is to give businesses the incentive and confidence to commit to larger projects to further their business and to contribute to the development of the industry as a whole.
Hastings Hotspot: How this seaside town has become a hub for photonic and high and ultra-high vacuum industries
The gorgeous seaside town of Hastings and the surrounding High Weald of Sussex has become a hotspot for technological innovators in the field of photonic and high and ultra-high vacuum industries. Tec66 have speculated that 11% of Hastings working population are working within the manufacturing sector which includes companies in the sector.
This cluster of tech businesses has been developing since the 1960’s when Vacuum generators (VG), now VG Scienta, was set up in St Leonards. The cluster has quickly grown and now has over seven innovative photonic, high and ultra-high- vacuum businesses that have investors from across the globe.
Are these businesses making the most of their R&D Tax Relief Claims?
We often find that although high-tech manufacturing businesses regularly carry out extensive innovation in new product development or product enhancement, they are usually unaware of their eligibility for R&D Tax Relief.
Luckily for one of our customers, they investigated their eligibility for R&D Tax Relief and we managed to save them over £240K in tax. This customer undertook their own R&D and were also involved in an Horizon 2020 project through the EU as result we were able to help them claim under both the SME Scheme and the RDEC scheme for these respective projects.
Their projects involved the development of industrial x-ray inspection machines, portable systems that combined two camera technologies with a laser range finder and even a covert driving system that used infrared panoramic cameras, what was more interesting is that they had to shelve a number of projects, but even these were eligible.
Even if you haven’t claimed, we can look at your two prior years for eligible projects and costs.
Rise of craft brewers and gin producers
We’ve seen lots of wonderful breweries crop up in the Sussex area including Long Man Brewery, Gun brewery, Burning Sky Brewery, and many more. All of which have their own distinct taste, which involved lots of R&D to achieve and maintain their development.
R&D Tax Relief isn’t limited to techies and those in white coats, breweries across the UK are also claiming back on their tasty creations. R&D Tax Relief is available for breweries that are creating both alcoholic and alcohol-free beverages, providing that the R&D that they have undertaken has overcome technological or often scientific uncertainty. So the introduction of exotic flavours or when to add flavour or at which temperature, to create the best profile would often involve significant trial and error.
We have worked closely with a hop processing business and managed to save them 35K on the design and development costs of a new and additional production process that improved product purity and yield.
Could you be eligible?
If you think that your business could be eligible for a R&D Tax Relief claim then get in touch with a member
of our team today on 01424 225 345.