Running a business whether start up or established is hard work and sourcing financing or grants to drive innovation and growth can often be a time-consuming exercise. However, the majority of eligible UK SME’s, miss out on, or do not maximize their entitlement to thousands of pounds of available government funding each year in the form of R&D Tax Credits, The Patent Box or Capital Allowances, three of the largest government incentive-reward funding mechanisms for business.
Sachin Chauhan from GovGrant, the UK’s leading specialist, service provider across these 3 regimes with over £175m gained for clients and a 100% success record says:
“90% of the qualifying businesses we meet were either unaware of the potential benefits of the schemes, mistakenly thought they were difficult to qualify for, underestimated their potential cash benefits, are under-claiming their full entitlement, or were previously advised that they didn’t qualify.”
For BFS members, GovGrant are pleased to offer a complimentary, consultation to ascertain if your business activities qualify for any of these government initiatives that can each provide a significant and often much needed business cash injection; facilitating higher risk development projects and potentially lowering external funding requirements, while enhancing your business’s profile to investors and lessening investor “risk”.
R&D Tax Credits reduce the cost of innovation and development activities by up to 33% for any company undertaking projects that seek to, or have achieved, a technological or scientific advance or appreciable improvement to a product, process, material, system, device or service through the resolution of scientific or technological uncertainty.
Irrespective of industry sector, R&D for scheme purposes is about creating new knowledge &/or capabilities.
Much of the work undertaken throughout a business to address a new development, design, technical or production challenge, improve systems & capabilities, productivity or efficiency is R&D….without the Laboratory or the “White Coat” usually associated with the term. Companies can recover allowable project investment costs for completed, ongoing or failed project activity. A good indication for qualification is if as a Limited company you are developing, regularly changing or seeking to improve the way products, materials or devices are made; improving manufacturing or engineering processes or services, developing deep tech solutions, software or bespoke systems/products. The R&D can be undertaken by or for the UK claiming company anywhere in the world. The average annual SME claim payout, received within 42 days from HMRC submission, is over £50,000pa. You can reach back two accounting years, your current and every forward year of qualifying activity. Loss making companies can receive a cash credit or offset against future corporation tax.
The Patent Box reduces the corporation tax rate to 10% on profits derived from the worldwide sale of patented products or processes, from patents filed by the UK claimant company with either the UK IPO (Intellectual Property Office) or the EPO (European Patent Office).
You need to be a UK Limited Company, liable for Corporation Tax, have contributed significantly to developing the patent and filed the patent in the name of the claimant company. Even If the patented element is minor, 100% of profits could still qualify. Profits made in the patent pending period qualify following patent grant. Claims can be made every year of the patent life. The development work on the patented product will in many cases also qualify for an R&D Tax Credit, delivering an additional cash benefit for the company. GovGrant works cost effectively with companies who have historically thought patenting costs prohibitive or their potential patent being of too narrow scope; ensuring that not only do they access a significant annual Corporation Tax reduction, but fully exploit their patented IPR, often the most valuable asset a company owns.
Capital Allowances can generate up to 45% tax allowances against qualifying expenditure on commercial property of all types.
When you acquire a capital asset to use in your business, the cost cannot be deducted. Instead, depreciation needs to be charged over the life of the asset. However, this is not allowable for tax purposes – a separate allowance known as Capital Allowances applies. A company, partnership or individual subject to either UK
corporation or income tax can claim if they are the owners of a commercial property, (freehold or long leasehold), and have Incurred qualifying expenditure on the property and its plant & machinery. An example of some common items that can be claimed are power, lighting and heating installations; data installations; suspended ceilings, specalist flooring, air conditioning; fire and security alarm systems; sanitary ware, kitchen fittings, lift installations….and many more depending on the commercial property use. As a Capital Allowance specialist GovGrant will often identify up to 4 times in additional allowances by assigning a specialist quantity surveyor versed in the scheme to carry out a full site survey, to uncover all claim possibilities.
Are you keen on meeting GovGrant in person? Come join us at our annual flagship show – Business Funding Show '19, taking place on 21st, Feb at East Wintergarden. It will be a one-stop-shop for all your funding needs! Learn more and secure tickets here