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Facts and Figures
Submissions & Review
Don’t waste your investment in Innovation –
optimise your R&D Tax Credit claims
Are your R&D projects technically complex?
Does your R&D Tax Credit advisor rely on you to do the technical evaluation element of your claim?
Are your R&D Tax Credit claims consuming a lot of time and expense?
Are you concerned that your R&D Tax Credit claims are not being optimised and you are under claiming?
Are you concerned that your R&D Tax Credit claims may not be fully compliant with HMRC rules?
Are you concerned you are not getting a quality, value for money service from your R&D Tax Credit service provider?
Are you unsure as to whether you qualify for R&D Tax Credits?
If you are answering YES to any of these questions, then you should talk to us!
The UK Government’s R&D Tax Credit scheme encourages and rewards both SME’s and large companies for investing in innovation. It offers a vital means to cut costs and improve cash flow, whilst keeping ahead of the competition.
Any limited company developing new products, technology or processes may be eligible.
It is a tax relief scheme, designed as an incentive for companies developing new technology – the more qualifying development work a company does, the greater the relief it can get from its Corporation Tax bill. Even loss-making companies can benefit (in terms of a “Credit”) which can be of particular importance to early stage businesses.
The scheme is one of the most attractive in the world and a company can claim retrospectively for up to 2 previous accounting years.
The benefits to a company vary according to the level and cost of development undertaken, whether it is an SME or a Large Company, and its Corporation Tax band, but it is not unusual for claimed expenditure to run into hundreds of thousands of pounds, with R&D tax credit relief typically in excess of £50,000 being realised.
There tends to be an automatic assumption by many companies that R&D Tax Credit claims are best handled by their accountant who can do the numbers while they provide the technical input. However, it is not just technical knowledge that is required, it is also an in-depth understanding of what potential R&D activity may or may not fit within the context of the R&D Tax Credits scheme legislation.
Claims prepared without this expertise can often result in a lot of the work having to be undertaken by the company, rather than its advisor, and a resulting claim that may be limited or inaccurate/non-compliant in its findings, followed by a hefty bill from the advisor!
HMRC can claw back ineligible claims for previous years, so whilst the probability of being audited may be quite low, is it worth the risk when there are better and more profitable solutions available? Furthermore, this process creates ‘grey areas’ around responsibility and accountability for the claim.
Some companies do use ‘specialists’ to undertake their R&D tax credit claims. However, many of these ‘specialists’ apply a similar accounting-based process which again relies on the company for the technical element. They add little value to the process.
Access to highly qualified technicians with experience in the client’s technology, who possess a thorough knowledge of the R&D Tax legislation and work in tandem with financial experts, will deliver a far more attractive output that is:
- Optimised in terms of claim value
- Fully compliant and defendable by the advisor, not the client
- Time efficient
- Cost effective
- Complementary to the company’s accountant’s activities
All Specialists are not the same – MSC R&D delivers the total solution
MSC R&D takes R&D Tax Credit applications to a new level. We match the right technical and financial expertise to your business, working with your existing accountant to achieve the maximum eligible benefit from the R&D Tax Credit scheme, whilst minimising your time commitment.Operating on a contingency basis, with no set up fees, MSC R&D has been successfully preparing R&D Tax Credit claims since the scheme’s inception in 2000.
Over 500 SME & Large Company Hi-Tech clients and over £125m R&D expenditure identified to date.
Talking your language
Our team of experienced technical and financial experts can drill deep into a client’s business and fully understand your R&D activity.
Our expertise and knowledge enables us to unearth missed projects and optimise the value of your R&D tax credits.
Our detailed technical reports & full financial audit trails mean we provide full visibility to HMRC.
Minimum client impact
Our ‘Fast-Track Blitz’ approach minimises the impact on your time. Normally our analysts only require one day on site.
No Financial Risk
We operate on a ‘Paid-on-Results’ basis, meaning no upfront financial commitment on your part.
We are ISO9001 accredited and European Foundation for Quality Management (EFQM) Committed to Excellence (C2E) 2 Star Certificate – with detailed proven processes and quality management.
Additional R&D Funding Services
We are specialists in R&D funding and commercialisation, offering a wide range of services including UK & EU R&D grant funding.
WHAT SHOULD I DO NEXT?
If you are already claiming via the R&D Tax Credits scheme but would like to have the confidence your claim is in the best possible hands, then contact us for more details on our service.
If you haven’t yet claimed for R&D Tax Credits and feel you are missing out on a significant opportunity, then contact us to establish whether you may have a valid claim.
Having already demonstrated their deep technical expertise and understanding of our business, it made complete sense to use MSC R&D. Their proven track record in R&D Tax Credits ensured our claim was optimised and in compliance with HMRC rules, with the minimum of impact on our day-to-day activities.
Paddy Lawton, Founder, Spend360 International
Patent Box is a relief targeted at companies of all sizes seeking to exploit patented inventions and will allow them to apply a reduced rate of corporation tax to all profits relating to qualifying IP.
The potential tax savings can be significant as 100% of all your product revenues potentially are included in the computation, irrespective of how large or small the actual patented component is compared to the size and cost of the overall product.
It is in addition to the R&D Tax Credit scheme, so companies can potentially benefit under both schemes.
CAPITAL ALLOWANCES – PEFFs & RDAs
Own your commercial premises or have incurred investment on a leased property in recent years?
Incurring capital expenditure (e.g. buildings and equipment) for the purposes of carrying out R&D?
Read on further!
Property Embedded Fixtures & Features (PEFFs)
Property Embedded Fixtures & Features (PEFFs)
Capital Allowances allow commercial property owners to claim qualifying items of capital expenditure as a tax deduction and are a valuable tax relief.
However, whilst Accountants regularly and comprehensively claim Capital Allowances on moveable items, furniture etc, based on invoices provided by their clients, the capital allowable items embedded within the property are often overlooked, resulting in claims typically less than 50% of entitlement.
Invoices are generally unavailable for these items and, until the accountant, owner or leaseholder instigates the process of identification i.e. a ROOM BY ROOM survey with appropriate costing of these qualifying items, they will remain unclaimed and a potential substantial benefit to the client will remain hidden.
Who can claim the benefit?
The tax benefit is available to the party that incurred the relevant expenditure or purchased the property i.e. an individual, a Company, partnership etc.
How is the benefit claimed?
The claim is used to generate a tax refund where possible and is used as a tax credit to reduce future tax liabilities.
How can MSC R&D help?
Recognising the specialist nature of this area of taxation, MSC R&D has developed a full service capability to offer our clients.
We have been proving this service for over 15 years, successfully handling 000’s of claims ranging between £60,000 and several million.
The MSC R&D methodology affords the client:
- Our intimate knowledge of Capital Allowances legislation
- Our stringent investigation of the previous handling of Capital Allowances
- Our professional surveying and costing of property
- Individual advice pertaining to each case
- Liaising with professional Advisors and HMRC
- Comprehensive aftercare during the time when HMRC may revisit a claim.
If you can answer YES to one or more of the following questions and are currently profitable and paying Corporation Tax:
- Do you own, or intend to since year end, a commercial property?
- Has there been significant expenditure on your existing commercial premises in recent years?
- If you lease premises, has there been significant expenditure on it in recent years?
RESEARCH & DEVELOPMENT ALLOWANCES (RDAs)
R&D allowances provide generous 100% first year tax relief for fixed asset capital expenditure carried out by trading companies, individuals and partnerships – unlike R&D tax credits which can only be claimed by companies. It is a first year allowance and can therefore only be claimed in an open year and expenditure must have incurred in that year.
So, if you are involved in R&D and you spend money on capital assets, certain expenditure can still qualify for R&D capital allowances (RDAs). It would first be necessary to identify and clarify what constitutes qualifying expenditure.
Examples of qualifying expenditure for RDA are:
- In essence the costs of buildings in which R&D is carried out and the equipment to conduct the R&D activity, all qualify.
- It is, however, important to note that when capital expenditure is incurred on a property for R&D purposes, only the building itself potentially qualifies for RDA, and not the land.
- Claims can be made for the designated part of the building where the R&D activity is carried out, but this must be readily identifiable.
Distinction of Revenue & Capital
A detailed review of amounts treated as capital items would need to be carried out in order to satisfy the conditions of what HMRC would accept as being ‘qualifying expenditure’ for the purposes of claiming allowances.
The main benefits of RDA are that they can give 100% tax relief on items for which no capital allowances (or Annual Investment Allowance – AIA) are normally claimable, such as a laboratory used for research etc.
There is no upper limit on the amount which can be claimed (unlike AIA).
How is the benefit claimed?
Relief can be claimed on the current tax return, or by way of amending a previous tax return, subject to the usual time limits of submitting an amended return.
As with PEFFs, the RDA is only of value to companies who are in a tax paying position.
How can MSC R&D help?
MSC R&D has the expertise to guide you and your accountant through the complete process. Typically we would help you identify and claim any eligible RDAs alongside our R&D Tax Credit service.