FSPA & Lboro Uni IPR and R&D Day - Capitus Sports

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FSPA & Loughborough University IPR, Innovation and Research and Development Day

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FSPA & Lboro Uni IPR and R&D Day - Capitus Sports

  1. 1. R&D Tax Relief:Are you getting thecredit you deserve...?Sports TechnologyInstitute, Loughborough9 September 2010
  2. 2. (i) Overview of R&D tax relief schemes(ii) R&D within sporting industries(iii)Misconceptions and concerns....(iv)Practical advice to maximise the relief www.capitusgroup.co.uk
  3. 3. (i) Small or Medium Enterprise (SME) regime(ii) Large Company Scheme(iii) Qualifying expenditure(iii) Research and development - definitions www.capitusgroup.co.uk
  4. 4. Pre 1 August 2008 Post 1 August 2008 < 250 Employees < 500 Employees and and Annual turnover not Annual turnover not exceeding €50m exceeding €100m or orBalance sheet totalling no Balance sheet totalling no more than €43m more than €86m www.capitusgroup.co.uk
  5. 5.  SME• Corporation tax relief at 175% on expenditure.• Equates to 15.75% saving on initial cost.• Loss surrender for cash back at a rate of 24.5%. Large Company• Corporation tax relief at 130% on expenditure.• Equates to 8.4% saving on initial cost. www.capitusgroup.co.uk
  6. 6. OR Reduced Surrender taxable profit lossRevenue R&D expense £1,000,000 Qualifying R&D £1,000,000Uplift at 75% £750,000 Uplift at 75% £750,000 Loss surrendered £1,750,000Total deduction will result in:Tax saved @ 21% of £367.5k Tax credit @ 14% £245k www.capitusgroup.co.uk
  7. 7. Revenue expenditure uplift 130% No surrender credit Effective tax saving (at 28%) of 8.4% on expenditure www.capitusgroup.co.uk
  8. 8.  Companies which receive funding for R&D activities may not claim under the SME Scheme. SMEs undertaking R&D on behalf of others may not claim under the SME scheme. www.capitusgroup.co.uk
  9. 9. • All companies: ◦ Staff costs (wages, employer NIC, pension but no BIK) ◦ Consumables ◦ Power, fuel, water used in R&D ◦ 65% of payments to agencies (externally provided workers)• SME regime only: ◦ 65% of payments for R&D contracted out to others• Large company regime only: ◦ Payments to qualifying bodies (e.g. universities) and individuals ◦ Customer funded research (but not where customer is SME) www.capitusgroup.co.uk
  10. 10. • Qualifying expenditure on Qualifying R&D• 100% R&D allowances available• Provides a permanent benefit for assets not qualifying for other allowances and may be claimed on buildings and facilities. www.capitusgroup.co.uk
  11. 11. That seeks toR&D takes To the resolution of achieve an With activitiesplace when SCIENTIFIC OR ADVANCE IN that DIRECTLY there is a TECHNOLOGICAL SCIENCE OR CONTRIBUTE PROJECT UNCERTAINTY TECHNOLOGY www.capitusgroup.co.uk
  12. 12. R&DSignificantly enhanced Advance insystems in terms of scalability, science/technologyspeed, reliability, flexibilityand security AND All this qualifiesBringing together different Technologicallytools and testing compatibility uncertainMaintenance Routine/Repeat www.capitusgroup.co.uk
  13. 13.  Products, materials, services, processes... In house and contracted projects Improving, upgrading, integration... Aborted projects / unsuccessful projects www.capitusgroup.co.uk
  14. 14.  Worried by H M Revenue and Customs? We don’t qualify?! We don’t have the resources! It will cost too much to claim! www.capitusgroup.co.uk
  15. 15. • Coalition Government want to ‘...refocus R&D’• Restrict Large Company Scheme?• Restrict industries?• Restrict rates for some and increase for others? www.capitusgroup.co.uk
  16. 16.  Consider R&D tax relief before commencement of project. Include within budgeting and accounting processes (and financing!!) Consider the costs which are incurred. Obtain guidance (and comfort) www.capitusgroup.co.uk
  17. 17. Contact details:Andrew ReidCapitus GroupEmail: reid@capitus.co.ukTel: 028 2564 7022 www.capitusgroup.co.uk

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