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4 Ways R&D Could Save Your Business - no title

5 Ways R&D Could Save Your Clients Business

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5 WAYS R&D TAX RELIEF CAN GET MONEY BACK INTO YOUR BUSINESS


R&D is a massively underutilised tax relief that many businesses could be benefitting from right now. We’re talking up to 33% of the costs incurred on activities that are considered eligible and this money can be used for any purpose. Money that is needed by businesses right now.

But, not only that, there are potential options for those businesses already making claims, to identify more funds.


1. R&D Tax Relief for a business with no previous claims

An SME company that qualifies for R&D Tax Credits can receive an extra deduction of 130% of qualifying costs against their taxable profits. This is in addition to the 100% revenue deduction already given. For loss-making companies, the loss can be given up (so can’t be used in future) for an immediate tax credit equating to a maximum of 33.4% of the qualifying costs. Claims can be made up to 2 years AFTER the end of the accounting year in which you incurred the costs. This means you can claim for costs that were incurred up to 3 years ago.

Example:
A company with an April year-end incurs R&D costs of £100k per year and has been loss-making as they are currently in the development phase with their product.

They can make an immediate R&D claim for their April 2018 and April 2019 periods. They have already deducted £100k of costs from their annual revenue but can also deduct another £130k per year due to R&D tax credits (130% of £100k). In total, the £100k spent allows them to deduct £230k from revenue.

If losses are large enough, they will receive a tax credit of nearly £67k (£100k x 2 years x 230% x 14.5%). This will be received by the company as tax-free cash.


2. R&D tax relief where a business has built up losses

Some companies have made R&D claims in the last 2 years and decided to carry forward losses made into the future – as it will save them corporation tax in the future. They should consider amending their tax returns now to change the carried forward loss to a tax credit.

Example:
A company has made R&D claims for the last 2 years which has built up an “R&D loss” of £500k. Due to their projected product launch and projected profits from commercialising, they had decided to carry this forward to get future corporation tax relief of £95,000.

Instead, they can file amended tax returns and claim immediate cashflow of £72,500.

3. Maximising previously claimed R&D tax relief

It is worth reviewing all previous R&D tax relief claims to ensure the claims were maximised. If they have not been maximised, amended returns can be submitted to claim additional tax relief.

Example:
The company has not claimed for all materials, heat and light costs, smaller subcontractors, support staff e.g. HR, admin, finance.

The total of all these costs come to £15k a year.

If they resubmit the R&D claim with these costs included, it could give a further £10k tax refund immediately (£15k x 2 years x 33%)


4. Obtaining advance funding for R&D tax relief

Advance funding may also be available for a claim in the current year.

Example:
A company has been making R&D claims for the last 3 years and gets £25k a year back from HMRC.

They have a June year-end, but their accounts and tax usually take 10 months to finalise. Advance funding is available in April 2020 for the June 2020 year-end, which would otherwise only have been received in June 2020. This effectively brings the cashflow forward by 15 months, with only the financing cost to the client.


5. Shorten year-end to accelerate tax credit

For a loss-making company, shortening the year-end so that an R&D claim can be submitted sooner is worth considering.

Example:

A company with a June year-end has R&D costs of £100k and total losses of £100k up to 31 March 2020. They anticipate a much-reduced R&D spend up to June.

They decide to shorted the year-end (9 months to 31 March 2020) which allows them to submit an R&D tax credit claim of £33,350 to HMRC 3 months sooner than otherwise would have been the case.


So, we’ve created a toolkit of resources to use with your clients to help reach out about R&D Tax Relief and determine if they are eligible. At the moment this toolkit is reserved for Radish and Diagnostax customers but do drop us an email at marketing@radish.tax if you’re interested in downloading the toolkit.


Do you have clients like this?

Help save their business. Use this link to book in a call and we’ll discuss the relevant options for your clients. 

 

Finding R&D in Construction.

Finding R&D in Construction

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AM I ELIGIBLE TO MAKE AN R&D TAX RELIEF CLAIM?

The key questions to ask yourself for any project you have undertaken are:

Have you gone beyond “the norm” within your industry?

This could be using new techniques, or re-thinking how something can be achieved because you were constrained by conventional methods. This could be from the types of materials used, all the way to the overall process and project management.

Have you then had technical difficulties and challenges in achieving what you have set out to do?

Also remember that this type of work could be for projects you have tendered for but have not ended up doing the work. So, if you have tendered for a project where the design involved technical advances and challenges, but you didn’t go ahead with the project, you could still claim for your time and costs in tendering.


TYPICAL PROJECTS

  • Integrating new technologies into builds / restorations that improve efficiency / reduce costs: e.g. testing heating systems or insulation that needs to be tested because of technical uncertainty over whether it will work in a specific environment.

  • Trying or testing new materials that are improved (e.g. stronger, cheaper, more environmental) whilst still conforming with regulations.

  • Innovative energy saving techniques that are challenging to implement.

  • Time spent on tendering for contracts, even if unsuccessful. So, if you had to think about technical problems and design solutions in order to tender for a contract, this can also qualify, even if you didn’t get the relief.

  • Designing or using new equipment that is new to the industry and needs to be technically upskilled on.

  • Changing processes to improve efficiency, reduce costs, or reduce waste. For example, recycling a waste product which has to be processed in order to make it disposable. Or for example removing hazardous materials from old buildings and separating out parts to be re-used or made recyclable.

  • Anything software related – if you’ve adopted technology like apps or platforms which you have built or modified yourself, then you may be able to claim for that.


CASE STUDIES

  1. Incorporating new materials into building design and construction: Our client was designing a set of new build apartments. They trialled and tested a new heating system to be incorporated into the building. Costs claimed were staff time, some testing materials and a subcontractor who installed some of the units.

    Claim size: £40k of costs, £10k corporation tax saving.

2. Incorporating new materials into building design and construction: Our client was building a large recycling plant and was finding methods to reinforce the concrete forecourt to increase the life of the ground used by heaving goods vehicles. Costs claimed were subcontractors – designers and engineers – and materials used in the testing phase.

Claim size: £120k of costs, £40k tax credit from HMRC.

3. Development of residential properties in a historic mill in north of England: Client was attempting to design the layout of the building to (a) maximise energy efficiency and (b) retain original features. This involved several technical challenges such as incorporation of different materials and complex CAD designs.

Claim size: £75k of costs, £25k tax credit refund from HMRC.

4. Software design to create lighting systems to maximise light and efficiency in a given space: The brief from the customer was to achieve a level of natural lighting throughout the building. The team investigated and designed techniques to achieve this using different models. Given the wide number of variables and uncertainty over how different aspect would interrelate, it took considerable time and technical work to come up with the best solution.

Claim size: £25k costs, £6.5k corporation tax saving.

5. Design of an off-grid containerised weather station that could be moved into place and withstand extreme weather conditions: This involved the experimentation of different materials and structural design. Due to the unique elements of the location and environment, the majority of the design and implementation was a technological advance and incurred several technical challenges.

Total claim size: £220k costs, £74k HMRC refund.

THINK YOU MIGHT BE ELIGIBLE?

Use this link to book in a 15-minute scoping call with one of our consultants. If you qualify, you can then book in to complete the rest of the information online in a 45-minute consultation.

One hour of your time, that’s it.

Recipro LinkedIn quote - where to find R&D

Reducing Waste. Building Lives. Claiming R&D.

THE CLAIM

Company name: Recipro (UK) Ltd
Industry: Environmental Services
Area of innovation: Remanufacturing and processing of waste paints
Claim size: £12,776.00 from HMRC


WHO ARE RECIPRO?

At Recipro their mission is to reduce waste through reuse, while benefitting the local community at the same time. They work with suppliers and contractors, who donate unwanted, surplus building materials which they can sell on at hugely discounted rates. Their customers range from charities to schools, churches to shops, as well as the local community. They simply don’t believe in waste!

Les Owens, MD of Recipro sums it up nicely with, “We’re like the Oxfam of construction.”

“We’re like the Oxfam of construction.”

Radish: How is Recipro eligible to make an R&D claim? 
Les Owens: “Well, I was aware of R&D but didn’t really understand it. However, I knew that as a business, we were completely changing how some huge organisations run their business and that no-one was doing what we were doing.

But there is a lot of time and effort that goes into trying to understand what our customers need from us – we don’t just take away the surplus materials, we have to calculate the carbon saving and measure the social impact of getting those products to the people who need them.

A lot of what we are doing, we’re not even sure it’s the right thing, a lot of it is trial and error, which I guess is just another way of describing research and development.

I guess we just don’t call it that, we just call it work!”

“A lot of what we are doing…is trial and error, which I guess is just another way of describing research and development.”

Radish: Did you feel confident you were eligible? 
Les Owens: “Yes, but I was conscious I didn’t want to waste anyone’s time as everyone is busy, so I wanted to be confident it would be worth our while and your while. In the back of my mind I was definitely thinking some of what we do must be research & development.

Actually, making the claim enabled the team to better understand more what it is we are doing because we all know the job that we do, but sometimes we don’t understand how we get there.

“In the back of my mind I was definitely thinking some of what we do must be research & development.”

Radish: What was your experience like making a claim? 
Les Owens: “It was a simple format. Initially the phone call to me was an overview of the business and whether we all agreed there was a claim to be made; then it was mainly over to Tim and James. It was very straight forward, and it happened in a very speedy time frame.

If I was to summarise Radish in one word it would be efficient and working with James at Elevate Advice is great, he allows me to not worry about finance, tax and the stuff your average guy running a business doesn’t have the time to do, so you can concentrate on the business.”

“It was very straight forward, and it happened in a very speedy time frame.”


INTERESTED?

Use this link to book in a 15-minute scoping call with one of our consultants. If you qualify, you can then book in to complete the rest of the information online in a 45-minute consultation. One hour of your time, that’s it.

R&D Architects

Finding R&D: Architects & Engineers

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AM I ELGIBILE TO MAKE A CLAIM?

The key questions to ask yourself for any project you have undertaken are:

Have you gone beyond “the norm” within your industry?

This could be using new techniques, or re-thinking how something can be achieved because you were constrained by conventional methods. This could be from the types of materials used, all the way to the overall process and project management.

Have you then had technical difficulties and challenges in achieving what you have set out to do?

Also remember that this type of work could be for projects you have tendered for but have not ended up doing the work. So, if you have tendered for a project where the design involved technical advances and challenges, but you didn’t go ahead with the project, you could still claim for your time and costs in tendering.


CASE STUDIES

  1. Incorporating new materials into building design and construction: Our client was designing a set of new build apartments. They trialled and tested a new heating system to be incorporated into the building. Costs claimed were staff time, some testing materials and a subcontractor who installed some of the units.

    Claim size: £40k of costs, £10k corporation tax saving.

2. Adopting new technology: Our client was adopting 3D scanning technology to survey historic buildings – costs claimed were staff time and some materials used for trialling the equipment.

Claim size: £30k of costs, £10k tax credit refund from HMRC.

3. Development of residential properties in a historic mill in north of England: Client was attempting to design the layout of the building to (a) maximise energy efficiency and (b) retain original features. This involved several technical challenges such as incorporation of different materials and complex CAD designs.

Claim size: £75k of costs, £25k tax credit refund from HMRC. 

4. BIM modelling: Adopting software to customise for the requirements of a project. Costs claimed were staff time, software and subcontractors.

Total claim size: £70k costs claimed, £18k corporation tax refund from HMRC.

5. Software design to create lighting systems to maximise light and efficiency in a space: The brief from the customer was to achieve a level of natural lighting throughout the building. The team investigated and designed techniques to achieve this using different models. Given the wide number of variables and uncertainty over how different aspect would interrelate, it took considerable time and technical work to come up with the best solution.

Claim size: £25k costs, £6.5k corporation tax saving.

6. Design of an off-grid containerised weather station that could be moved into place and withstand extreme weather conditions: This involved the experimentation of different materials and structural design. Due to the unique elements of the location and environment, most of the design and implementation was a technological advance and incurred several technical challenges.

Claim size: £110k costs, £37k HMRC refund.

7. Incorporating new materials into building design and construction: Our client was building a large recycling plant and was finding methods to reinforce the concrete forecourt to increase the life of the ground used by heaving goods vehicles. Costs claimed were subcontractors – designers and engineers – and materials used in the testing phase.

Claim size: £120k of costs, £40k tax credit from HMRC.


THINK YOU MIGHT BE ELIGIBLE?

Use this link to book in a 15-minute scoping call with one of our consultants.

If you qualify, you can then book in to complete the rest of the information online in a 45-minute consultation.

One hour of your time, that’s it 😊

The Coach House - Twitter & LinkedIn Quote 1

Restaurants can claim R&D? Here’s how The Coach House Inn saved £28K

Meet Les & The Coach House Inn

The Coach House Inn is a Gastropub and Hotel based in Chester.

We caught up with Les Owens, Director at The Coach House Inn to find out about their business innovations and their experience, making a claim with us. For Les, it starts with people:

“My focus is on our people. We really look after our staff because in this industry serving the general public, you must enjoy what you are doing, as it will massively impact your customers experience. That is key. So together as a team with the chefs we’ve worked hard to craft a menu of home-cooked food, taking inspiration from the seasons and locally sourced produce catering for all tastes from vegetarian, to vegan, to gluten-free.”

How is The Coach House Inn eligible to make a claim?

Despite not initially believing they could be eligible, the gastropub made a claim for the development of innovative menus, catering for vegan and gluten free diets, without compromising on their overall consumer experience.

“I actually didn’t think we’d have a claim, I still can’t believe it – we’re only a small restaurant & hotel! But having spoken to Tim, it’s down to all the hard work that goes into crafting our menus to cater for vegetarians, vegans and those with a gluten-free diet.

It’s very difficult to get a menu that suits all tastes and needs, and we can’t have half a dozen different menus as it doesn’t’ make economic sense. Looking at a menu you don’t see the work that has gone into it, but we do it because we want to please everyone who walks through the door – that is R&D for The Coach House Inn.”

Making the claim with Radish & Elevate Advice

We asked Les about his experience making a claim with Radish and his accountant James at Elevate Advice.

“It was a very simple format. Initially the phone call to me was an overview of the business and whether we all agreed there was a claim to be made; then it was mainly over to Tim and James. It was very straight forward, and it happened in a very speedy time frame.

If I was to summarise Radish in one word it would be efficient and working with James at Elevate Advice is great, he allows me to not worry about finance, tax and the stuff your average guy running a business doesn’t have the time to do, so you can concentrate on the business.”

How much did The Coach House Inn save?

Working together with James at Elevate Advice, Radish saved The Coach House Inn £13,746 and £14,289 for the two respective accounting periods ending 31 December 2017 and 31 December 2018.

Interested?

Use this link to book in a 15-minute scoping call with one of our consultants. If you qualify, you can then book in to complete the rest of the information online in a 45-minute consultation. One hour of your time, that’s it.

Julie Carter quote 5 - LinkedIn

Brand & Digital Communications Agency saves cash in R&D Tax refund

Meet Thrive Creative

Thrive Creative are a Brand & Digital Communications Agency. They work with ambitious brands to help them realise their true potential. Discovering those powerful insights at the core of brilliantly simple ideas that transform brands and engage audiences, whatever the medium.

We caught up with Julie Carter, Finance & Operations Director at Thrive Creative to find out about their experience, making a claim with us.

How did you find out about R&D, and Radish?

“Well, we have done two claims previously with another R & D provider, but the experience was terrible. Our previous accountant couldn’t help us at it wasn’t his area, so we asked some other businesses we knew, who referred us to the previous company that delivered our R&D claim but the process with them was quite time consuming.

Eventually, we ended up changing accountants to Elevate Accounting Solutions, who introduced us to Tim at Radish and ever since we came on board the experience has been amazing.”

Did you have any doubts before undertaking an R&D claim with Radish?

“100%. In fact, I was very unsure. I was working to some tight internal deadlines; we’d only just changed accountants to Elevate Accounting and there was a deadline if we wanted to make the claim. My only experience of an R&D claim before was that it needed a lot of my time. So yes…I was very cautious!

But after one video call with Tim, all doubts evaporated as your process was so well signposted; the time you would need was well-articulated and then actually stuck to as well. I was filled with confidence after that call. Everything was plain sailing.”

How did you find the process with Radish?

“Just excellent, straight forward, very easy to understand, excellent service and very smooth in delivery.

On the first call Tim signposted the process so well. The process itself was smooth and my time was so well considered versus previous experiences. We had an initial scoping call and then a further call with the MD and then you really did the rest. Everything else was done very efficiently – it felt smooth and was completely stress free.”

How much did Thrive Creative save?

We found qualifying spends of £90,837.92 and £69,112.18 for the two respective accounting periods ending 30 September 2017 and 30 September 2018. 

How has Radish helped you achieve your personal & business goals?

“The big one is around planning ref corporation tax. It’s always been a problem for us, not only do we almost feel like we have got the last two years of CT back, it feels like that. It’s also the case that we can now properly plan ahead in real time as we actually undertake the work. That puts us in such a stronger position to plan ahead, which is what we are about.

The other big goal you’ve helped us meet is creating more time in the business by delivering everything so efficiently.”

Would you recommend Radish?

I’d recommend without hesitation; in fact, we already have!

Interested?

Use this link to book in a 15-minute scoping call with one of our consultants. If you qualify, you can then book in to complete the rest of the information online in a 45-minute consultation. One hour of your time, that’s it.

Dr Neil Philips, APAC Ltd

R&D in archaeology? Yep.

Who is APAC and what do they do?

Meet APAC, they provide professional archaeological services to the private and commercial sectors. Established in 2004, the staff now have over 30 years of archaeological experience and have carried out a wide range of projects across England and Wales.

We were introduced to Neil Philips, Director at APAC, via Cooper Healy Accountants, an accountancy firm based in Merthyr Tydfill and Cardiff, to find out if we could qualify and make an R&D claim on their behalf.

Here’s how Neil and the team at APAC, received a corporation tax refund of £4,449.45.

How did you find out you qualify for R&D?

When APAC contacted us, they’d never heard of R&D Tax Relief. Neil explained,

“This all came as a surprise; I’d never heard of R & D and didn’t know it existed. I received a cold call from someone saying I might qualify for R&D (not Radish), and it all sounded too good to be true. So, I contacted my accountant.

My accountant put me straight in contact with Radish which gave me more confidence. You cost less than the cold caller people as well!”

The ball was now rolling.

What was the process to claim?

We asked Neil how he found the Radish claim process, here’s what he had to say:

“You were friendly, helped me understand what I needed to understand and really easy to deal with.

The process was efficient, although it didn’t really feel like a process, it only took a small amount of my time.  I had an hour phone call with Tim, an R&D Tax Specialist at Radish, where I answered a series of questions about our business projects – that’s all. Once all the information was extracted, it was over to Radish and my Accountant.”

How much did APAC receive?

We were delighted to secure a corporation tax refund of £4,449.45 for APAC, bringing cash back into their business to achieve their goals. When we caught up with Neil, he already had plans for the cash,

“The R&D claim has helped with cash flow and I’m now planning to spend the money on advertising.

 I would absolutely recommend Radish….except not to my competitors, I wouldn’t want to share the advantage!”

Another happy client. 😊

Interested?

Use this link to book in a 15-minute scoping call with one of our consultants. If you qualify, you can then book in to complete the rest of the information online in a 45-minute consultation. One hour of your time, that’s it 😊 .