Breakfast Briefings - Funding R&D - November 2017
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Funding R&D session aims to give an overview of three key elements of funding and using R&D, namely; •Assistance with funding R&D through grants and business support. •Maximising the benefits of R&D through government tax incentives. •Protecting and using the intellectual property created by R&D to enhance its value.
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Breakfast Briefings - Funding R&D - November 2017
- 1. Funding R&D: Inspiration, perspiration and (how to avoid) exasperation Breakfast Briefings: Autumn/ Winter 2017 7th November 2017
- 3. pkf-francisclark.co.uk . Presentations followed by discussion Presenter Topic Daniel Sladen Director, PKF Francis Clark How R&D benefits businesses and maximising that benefit through remuneration and legal planning for tax credits Josie Gough South Regional Manager, Innovate UK Innovate UK: funding business innovation Jowanna Conboye Intellectual Property and IT, Stephens Scown Protecting and using your R&D: an overview of the intellectual property landscape and how proper protection can add to your bottom line.
- 5. Contents • Overview of R&D incentives • Qualifying activities • Qualifying expenditure • Complications • Other things to think about pkf-francisclark.co.uk
- 6. pkf-francisclark.co.uk . Who it’s for • Companies carrying out qualifying research and development • Not available to sole traders/partnerships – consider whether incorporation is worthwhile • SMEs: R&D tax credit • Large companies: R&D expenditure credit (RDEC)
- 7. pkf-francisclark.co.uk . What it’s worth • An extra 130% deduction against corporation tax • 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)
- 8. pkf-francisclark.co.uk . What it’s not • Based on income or profits • Related to creating particular class of IP • Driven by success (failures can be useful) • Limited to “hi-tech” businesses
- 9. pkf-francisclark.co.uk . What it is • “A project… • …that seeks to achieve an advance in overall knowledge or capability… • …in a field of science or technology… • …through the resolutions of scientific or technological uncertainty” • Relief for expenditure on people, software and consumables
- 10. pkf-francisclark.co.uk . 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”?
- 11. pkf-francisclark.co.uk . Expenditure in more detail • Employment costs: costs of staff engaged in R&D activity including NI, pension contributions, recruitment costs • “Directly involved” staff only – no allocation of admin, back office, support • Consider employment vs consultancy vs agency • Consumables: heat, light and water, materials used (unless subsequently sold)
- 12. pkf-francisclark.co.uk . How to identify expenditure • As accurately as possible . . . • Reasonable, consistent, auditable methodology • Identify the best allocation key • Real-time data capture
- 13. pkf-francisclark.co.uk . 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
- 14. pkf-francisclark.co.uk . 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?
- 15. pkf-francisclark.co.uk . Grants and subsidies • In many cases, RDEC claim is still possible • SME claim could still be available where not all costs are covered • Complex area – need to review each case individually
- 16. pkf-francisclark.co.uk . Owner-managed businesses • Remuneration strategy could be affected if owners involved in R&D activity • Correlate remuneration with periods of more R&D • Pension contributions become more valuable (subject to usual caveats)
- 17. pkf-francisclark.co.uk . Other things to think about • Timing: two years to claim (if no claim has ever been made, can effectively do three years at once) • Advance assurance • Success fee vs fixed fee • Could patent box be useful too?
- 18. pkf-francisclark.co.uk . Contacts Daniel Sladen - daniel.sladen@pkf-francisclark.co.uk Jackie Oddy - jackie.oddy@pkf-francisclark.co.uk PKF Francis Clark Truro: (01872) 276477
- 19. (c) copyright PKF Francis Clark, 2016 You shall not copy, make available, retransmit, reproduce, sell, disseminate, separate, licence, distribute, store electronically, publish, broadcast or otherwise circulate either within your business or for public or commercial purposes any of (or any part of) these materials and / or any services provided by PKF Francis Clark in any format whatsoever unless you have obtained prior written consent from PKF Francis Clark to do so and entered into a licence. To the maximum extent permitted by applicable law PKF Francis Clark excludes all representations, warranties and conditions (including, without limitation, the conditions implied by law) in respect of these materials and /or any services provided by PKF Francis Clark. These materials and /or any services provided by PKF Francis Clark are designed solely for the benefit of delegates of PKF Francis Clark. The content of these materials and / or any services provided by PKF Francis Clark does not constitute advice and whilst PKF Francis Clark endeavours to ensure that the materials and / or any services provided by PKF Francis Clark are correct, we do not warrant the completeness or accuracy of the materials and /or any services provided by PKF Francis Clark; nor do we commit to ensuring that these materials and / or any services provided by PKF Francis Clark are up-to-date or error or omission-free. Where indicated, these materials are subject to Crown copyright protection. Re-use of any such Crown copyright-protected material is subject to current law and related regulations on the re-use of Crown copyright extracts in England and Wales. These materials and / or any services provided by PKF Francis Clark are subject to our terms and conditions of business as amended from time to time, a copy of which is available on request. Our liability is limited and to the maximum extent permitted under applicable law PKF Francis Clark will not be liable for any direct, indirect or consequential loss or damage arising in connection with these materials and / or any services provided by PKF Francis Clark, whether arising in tort, contract, or otherwise, including, without limitation, any loss of profit, contracts, business, goodwill, data, income or revenue. Please note however, that our liability for fraud, for death or personal injury caused by our negligence, or for any other liability is not excluded or limited. PKF Francis Clark is a trading name of Francis Clark LLP. Francis Clark LLP is a limited liability partnership, registered in England and Wales with registered number OC349116. The registered office is Sigma House, Oak View Close, Edginswell Park, Torquay TQ2 7FF where a list of members is available for inspection and at www.pkf-francisclark.co.uk. The term ‘Partner’ is used to refer to a member of Francis Clark LLP or to an employee. Registered to carry on audit work in the UK and Ireland, regulated for a range of investment business activities and licensed to carry out reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England and Wales. Partners acting as insolvency practitioners are licensed in the UK by the Institute of Chartered Accountants in England and Wales. A partner appointed as Administrator or Administrative Receiver acts only as agent of the insolvent entity and without personal liability. Francis Clark LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Disclaimer & copyright pkf-francisclark.co.uk
- 20. Innovate UK: Supporting business-led innovation Josie Gough South West Regional Manager
- 21. Activity Discovery & Research Innovation Commercialisation TRL Description Basic principles observed and reported Concept or application formulated Experimental proof of concept Concept or process validated in laboratory System or component validated in relevant environment System model or demonstrator in relevant environment System prototyping demonstrator in operational environment Actual System completed and qualified test & demo operational environment Actual system mission proven in successful mission operationsSource: NASA Technology Readiness Level model Academia Business Funding & Support for Business Led Innovation
- 23. Where does Innovate UK funding go? Data: 2015-16 60% businesses 20% researchers 20% RTOs 82% of collaborative projects involve research base partner We work with >140 individual research base organisations (inc Institutes and RTOs)
- 24. Emerging and Enabling Health and Life Sciences Infrastructure Systems Manufacturing and Materials Open Programme Closes Nov Reopens March 2018 Open now – until December 2018 Opens Jan 2018 – March 2018 Open now until 10th January 2018 Open Dec 2018 – Feb 2018 Our competitions schedule includes programmes run with partners – more details on our webpage Sectors approach to supporting businesses
- 25. Sept 2017 Next sector competition July 2017 Next sector competition Now open Shortly to close next one Nov 2017 Now open Competition characteristics and process Core competitions, Industrial Strategy Challenge Fund, Other organisations funding, Small Business Research Initiative, Knowledge Transfer Partnerships • Competition design (inc. streams, in scope out of scope etc.) • Competition launch • Applications invited via new online portal • Usually single stage application • Usually need match funding though academic partners can get 100% • Single organisation applications for less than £100k otherwise consortia • Deadline passes, assessors score and provide feedback • Average of the five assessors score • Ranked list & Portfolio review – assessment panel • Due diligence & Contracting • Money paid quarterly in arrears IMPACT,IMPACT,IMPACT!
- 26. Investing in science, research & innovation Upgrading infrastructure Improving procurement Delivering affordable energy & clean growth Driving growth across the whole country Developing skills Supporting businesses to start & grow Encouraging trade & inward investment Cultivating world- leading sectors Creating the right local institutions
- 27. 27 Industrial Strategy Challenge Fund • Industry-led and powered by multi-disciplinary research and business academic collaboration. • Develop UK industries that are fit for the future, driving progress in technologies where the UK can become a world-leader in research and commercialisation Industrial Strategy Challenge Fund
- 29. Knowledge Transfer Partnership Strategic relevance to the business : IMPACT – Embedding of Innovation Culture Stimulating and challenging for the academic team : CHALLENGE Intellectually challenging for the Associate : INNOVATION Sound business case : HIGH GROWTH POTENTIAL Clear knowledge transfer: Innovate UK Clear additionality: we want high level innovation, and economic impact plus any societal impact. Benefits likely to accrue: TO ALL PARTNERS
- 30. Funding Levels and position of KTP Projects • >75% of projects are with SMEs (EU Definition) - 50% employ less than 50 people - 15% are micro companies • SMEs contribute 33% towards project cost - Company contribution is between £25-30k per annum • Large companies contribute 50% - Company contribution is between £35-45k per annum • Majority of KTPs sit in TRL 5-7 range • Typical project is 24 months in duration (12-36 months possible) • Highly focussed projects (TRL, Associate role)
- 31. Contact details for business facing staff for Innovate UK • Andy Treen Andy.treen@ktn-uk.org • Layla Burrows Layla.burrows@businesswest.co.uk
- 33. Jowanna Conboye IP & IT Associate 01872 265112 ip.it@stephens-scown.co.uk
- 34. THE FOUR TYPES OF IP Copyright Trade Marks Design Rights Patents Moral Rights Goodwill Passing Off Database Rights Unregistered Marks Unregistered Designs Trade Secrets Websites Get Up Trade Dress Service Marks Business NamesDomain Names Know-How Unfair Competition Confidential Information
- 35. Patents
- 36. DESIGNS
- 39. Trade Marks – the ‘badge of origin’
- 40. BRAND PROTECTION - TRADE MARKS Unregistered Registered TM ® Automatically occurring Government endorsed monopoly Difficult and expensive to enforce Certainty and Security
- 41. Company Name Domain Name Trading Name
- 43. COLLABORATION AND THE OPEN IP SYSTEM?
- 44. OWNERSHIP Who created the work? Licence v. Assignment The need for written agreements
- 45. WHAT THE FUNDS WILL LOOK FOR What IP will you be creating How can you demonstrate that you will own it? What due diligence has been done to ensure that the IP does not infringe the rights of third parties? What steps have been taken to protect the IP? What contracts are in place with those who have created IP?
- 48. Funding R&D: Inspiration, perspiration and (how to avoid) exasperation Breakfast Briefings: Autumn/ Winter 2017 – Wrap up: Tom Roach, Partner, Francis Clark 7th November 2017
- 49. pkf-francisclark.co.uk . RDI funding and business support in CIOS
- 50. Next… Q&A and/ or discussion • With opportunity for Q&A for presenters • Discussion Future presentations • “International trade” (5/12/17) – invite in pack • Finance in Cornwall (18/4/18) pkf-francisclark.co.uk
- 51. (c) copyright PKF Francis Clark, 2016 You shall not copy, make available, retransmit, reproduce, sell, disseminate, separate, licence, distribute, store electronically, publish, broadcast or otherwise circulate either within your business or for public or commercial purposes any of (or any part of) these materials and / or any services provided by PKF Francis Clark in any format whatsoever unless you have obtained prior written consent from PKF Francis Clark to do so and entered into a licence. To the maximum extent permitted by applicable law PKF Francis Clark excludes all representations, warranties and conditions (including, without limitation, the conditions implied by law) in respect of these materials and /or any services provided by PKF Francis Clark. These materials and /or any services provided by PKF Francis Clark are designed solely for the benefit of delegates of PKF Francis Clark. The content of these materials and / or any services provided by PKF Francis Clark does not constitute advice and whilst PKF Francis Clark endeavours to ensure that the materials and / or any services provided by PKF Francis Clark are correct, we do not warrant the completeness or accuracy of the materials and /or any services provided by PKF Francis Clark; nor do we commit to ensuring that these materials and / or any services provided by PKF Francis Clark are up-to-date or error or omission-free. Where indicated, these materials are subject to Crown copyright protection. Re-use of any such Crown copyright-protected material is subject to current law and related regulations on the re-use of Crown copyright extracts in England and Wales. These materials and / or any services provided by PKF Francis Clark are subject to our terms and conditions of business as amended from time to time, a copy of which is available on request. Our liability is limited and to the maximum extent permitted under applicable law PKF Francis Clark will not be liable for any direct, indirect or consequential loss or damage arising in connection with these materials and / or any services provided by PKF Francis Clark, whether arising in tort, contract, or otherwise, including, without limitation, any loss of profit, contracts, business, goodwill, data, income or revenue. Please note however, that our liability for fraud, for death or personal injury caused by our negligence, or for any other liability is not excluded or limited. PKF Francis Clark is a trading name of Francis Clark LLP. Francis Clark LLP is a limited liability partnership, registered in England and Wales with registered number OC349116. The registered office is Sigma House, Oak View Close, Edginswell Park, Torquay TQ2 7FF where a list of members is available for inspection and at www.pkf-francisclark.co.uk. The term ‘Partner’ is used to refer to a member of Francis Clark LLP or to an employee. Registered to carry on audit work in the UK and Ireland, regulated for a range of investment business activities and licensed to carry out reserved legal activity of non-contentious probate in England and Wales by the Institute of Chartered Accountants in England and Wales. Partners acting as insolvency practitioners are licensed in the UK by the Institute of Chartered Accountants in England and Wales. A partner appointed as Administrator or Administrative Receiver acts only as agent of the insolvent entity and without personal liability. Francis Clark LLP is a member firm of the PKF International Limited network of legally independent firms and does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms. Disclaimer & copyright pkf-francisclark.co.uk
- 52. Agritech Cornwall Elizabeth Gilbert Agritech Business Engagement Manager Cornwall Development Company Liz.gilbert@cornwalldevelopmentcompany.co.uk agritech@cornwalldevelopment.com T: 01872 322672 M: 07483134989 52
- 53. 53 AeroSpace Cornwall Natasha Downing AeroSpace Project Administrator Cornwall Development Company Natasha.downing@cornwalldevelopmentcompany.co.uk T: 01209 615567
- 54. 54 Marine I Doreen Gibbons Marine I Challenge Fund Administrator Cornwall Development Company Doreen.gibbons@cornwalldevelopmentcompany.co.uk T: 01209 615091
- 55. AT I Innovation Fund John Hutchings Innovation Fund Manager – Acceleration through Innovation University Of Plymouth Pool Innovation Centre, Trevenson Road, Pool, Redruth, Cornwall TR15 3PL M: 07860 756862 | E: john.hutchings@plymouth.ac.uk
Editor's Notes
- Data in slide is all Innovate UK portfolio to date Useful stat if needed from 2015-16 is that SMEs were awarded 55% of Innovate UK’s committed funding
- Our budget is spread across business-led collaborative projects, Catapults, IKCs and projects by a single company. Working with the research community and across government to turn scientific excellence into economic impact, and deliver results through innovation. Partnering with the Research Councils and others to commercialise our science advantage: IKCs for nucleating new industries – EPSRC on Cyber Security(Belfast); Ground breaking Catalyst programmes – Energy, Agritech, Industrial Biotech & Biomedical More effective leverage of science base – transfer of knowledge into businesses; high quality spinouts with HEFCE & SETsquared universities Collaborative projects with two or more academic partners deliver more than twice the ROI than those with none.
- These characteristics are not necessarily common to all the competitions and SBRI is the clear outlier where thinks are different but it’s a good starting point and we can discuss for example the ISCF can’t ever be an application from a single organization. There are a few other bits where I can talk further such as the necessity for academic partners to submit their application through Je-S which is the system the research councils use and so it validates their costs but trying to keep the number of slides to a minimum and trying to tease out each difference / nuance etc. would lead to a very complicated set of slides! You can cover specifically the KTPs within your session.
- First three challenges announced in the budget 1 is currently open (Robotics and AI): batteries that will power the next generation of electric vehicles, helping to tackle air pollution artificial intelligence and robotics systems that will operate in extreme and hazardous environments, including off-shore energy, nuclear energy, space and deep mining developing brand new medicine manufacturing technologies, helping to improve public health Wave 2 areas currently in ‘deep dive’ to present the business case as to what the fundamental challenges are.
- There are UK, EU and Worldwide trade mark registration systems. A cost effective way of protecting the appearance of your product; An alternative or compliment to patent protection.