Posts Tagged ‘R&D’

R&D Tax Credits for architects

Posted on: August 31st, 2012 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

UK architects are among the most creative and innovative in the world. However, many architectural practices are not taking advantage of the Government’s Research & Development (R&D) tax incentives.

Each year the Government, through the tax system, provides approximately £1 billion of support, to over 9,200 companies for over £10 billion of R&D expenditure.

The Royal Institute of British Architects (RIBA) has recently published free guidance for architects on the tax credits that are available for R&D ‘UK Research and Development Tax Credit Scheme – a guide for architects’. This has been published in response to Institute concerns that architects may be unaware they are missing out on thousands of pounds in tax credits for their R&D work.

There have been a number of changes to the R&D tax relief scheme since it was introduced in 2000, with the majority of these changes being advantageous for the companies claiming the relief.  For instance, since 1 April 2012 the rate of the enhanced R&D tax deduction has increased to 225%.  Thereby a company incurring £100,000 of R&D expenditure could potentially claim an additional £125,000 tax deduction (i.e. in addition to the £100,000 actually spent).  This could reduce the company’s tax liability by an additional £30,000.

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Grant Support for Research and Development in Wales

Posted on: July 31st, 2012 by Mike Fenwick No Comments
Mike Fenwick, Director, MHA Broomfield Alexander

Mike Fenwick, Director, MHA Broomfield Alexander

Grant support is available from the Welsh Government in order to encourage companies to undertake Research and Development activities in Wales.

The funding is aimed at supporting SME’s although non SME’s can potentially access support on an exceptional basis.

The funding is available throughout Wales and is not restricted to Grant Assisted Areas.

Grant support can be provided through the following schemes:

1. Innovation Vouchers – Innovation vouchers are available to support R&D activities undertaken up to a maximum of £10,000 and 50% of eligible project costs per innovation voucher. An applicant company can apply for 2 innovation vouchers in any 12 month period. Eligible costs are limited to the costs of using external suppliers to undertake the work.

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Encouraging innovation through the tax system

Posted on: July 20th, 2012 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

Since the Research & Development (“R&D”) tax relief scheme was introduced in 2000 it has undergone many changes.  However, the underlying theme of these changes remains the same – to encourage innovation.  To achieve this objective, increasing the generosity of the R&D scheme has been considered vital.

An SME (a small & medium sized enterprise – generally a company with less than 500 employees) can now claim tax relief equivalent to 225% of the amount it spends on R&D.  For example, if a company spends £100,000 it can claim tax relief of £225,000, thereby potentially reducing its tax liability by an additional £30,000.

In addition, a loss making SME has the option to claim a tax free cash sum from HMRC.  This cash option has, for years, provided an invaluable source of funding, with approximately 25p in the pound potentially claimable (i.e. up to £25,000 of actual tax free cash could be claimed for an R&D spend of £100,000).

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Is your company claiming / maximising its entitlement?

Posted on: February 14th, 2012 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

Many companies in South Wales are believed to have paid, and are continuing to pay, excessive amounts of tax because they are failing to claim (or maximise) a generous tax incentive which they are entitled to.

What is Research & Development (“R&D”) tax relief all about?

Ultimately, R&D tax relief is about reducing a company’s tax liability and thereby increasing the amount of cash in the company or in the hands of its shareholders. 

R&D tax relief enables companies to claim an enhanced tax deduction for all qualifying expenditure incurred.  The rate of this enhanced tax deduction has now increased to 200%, and is set to increase to 225% from next April.

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R&D unravelled…

Posted on: July 26th, 2011 by Leighton Reed No Comments
Leighton Reed, Director, MHA Broomfield Alexander

Leighton Reed, Director, MHA Broomfield Alexander

The Government has recently implemented further changes to the Research & Development (“R&D”) tax relief schemes, and further changes are set to take effect from 1 April 2012.  By way of background, we have addressed two key questions prior to outlining these changes:

1.       What qualifies as R&D for “tax purposes”

What qualifies as R&D for “tax purposes” is often significantly different from what people perceive to be R&D.  We have experience of submitting successful R&D claims for companies which initially thought their activities would not qualify.  We have assisted numerous companies in the submission of successful R&D claims, maximising their R&D entitlement by ensuring the entire range of activities (which can include routine work associated with the R&D project) and costs have been captured and claimed.

If you can answer yes to any of the following questions (or if you think the answer is yes) we suggest you speak to Leighton Reed, or a member of our Tax Team who would be happy to assist:

·         Are you investing resources to keep ahead of the game?

·         Are you doing something that is innovative or unique?

·         Are you working on solving a problem that has never been solved before (or the solution is not within the public domain)?

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