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Tech Finance and R&D Tax Credits (Andrew James)
www.website.com
Software Cornwall: Tech Connect Tech Finance and R&D Tax Credits - - PowerPoint PPT Presentation
Software Cornwall: Tech Connect Tech Finance and R&D Tax Credits - - PowerPoint PPT Presentation
1 Software Cornwall: Tech Connect Tech Finance and R&D Tax Credits (Andrew James) Me www.website.com Us 4 Truro office Other offices www.website.com Fields of expertise Corporate Finance Wealth Planning Cloud Accounting
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Us
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Truro office
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www.website.com
Other offices
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Fields of expertise
- Corporate Finance
- Wealth Planning
- Cloud Accounting
- IR35
- VAT
- Insolvency
- …
- Tax!
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Love Tax?
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No Love for Tax?
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R&D Tax Credits
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www.website.com
Who can claim it?
- Companies carrying out qualifying research and
development (obviously)
- Not available to sole traders/partnerships –
consider whether incorporation is worthwhile
- SMEs: R&D tax credit
- Large companies: R&D expenditure credit
(RDEC)
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What do you get if you qualify?
- An extra 130% deduction against
corporation tax for project costs
- Value approximately 25p in £1 if
used to reduce tax liability
- Or repayable tax credit worth 14.5p
in £1
- RDEC: 11p in £1 (but taxable, so
about 9p)
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What isn’t R&D
- It’s not men and women in white lab coats!
- It’s not based on income or profits
- It’s not related to creating IP
- It’s not driven by success (failures can be useful)
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www.website.com
It does need to be…
- “A project…
- …that seeks to achieve an advance in
- verall knowledge or capability…
- …in a field of science or technology…
- …through the resolutions of scientific or
technological uncertainty”
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Uncertain?
- “Scientific or technological uncertainty
exists when knowledge of whether something is scientifically possible or technologically feasible, or how to achieve it in practice, isn’t readily available or deductible by a competent professional working in the field”
- What are the uncertainties?
- How did you try to overcome them?
- Why was the knowledge not “readily
deducible”?
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www.website.com
Qualifying costs
- Employment costs: costs of staff engaged in
R&D activity including NI, pension contributions, recruitment costs
- “Directly involved” staff only – no allocation
- f admin, back office, support
- Consumables: heat, light and water,
materials used (unless subsequently sold)
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Subcontracting Out
- R&D is carried out by a subcontractor on your
behalf
- Claim limited to 65% of cost to you
- Different treatment for connected parties
- Election to treat as connected
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Subcontracting In
- For R&D carried out as
subcontractor, may be able to claim under RDEC
- Still based on expenditure
- Consider nature of relationship: are
you delivering R&D or carrying out R&D in order to deliver product?
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www.website.com
Other matters to consider
- State aid and interaction with R&D claims, i.e.
grants
- RDEC (Large business R&D) not state aid – so
an option
- Timing: two years to claim (if no claim has ever
been made, can effectively do three years at
- nce)
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www.website.com
Even more matters to consider
- Advance assurance
- Pay directors more… pension contributions…
- Think ahead if possible!
- Could patent box be useful too?
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Top tech tip!
Andrew’s top tech tip…
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Perhaps not a ‘top tech tip’
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www.website.com