A short introduction to UK R&D Tax Credits and other government funding instruments. Find out more at www.empowerrd.com.

1. © 2020 EmpowerRD Limited. All rights reserved.
Guide to R&D Credits
and Other
Government Funding

2. © 2020 EmpowerRD Limited. All rights reserved.
Agenda
• Intros
• R&D Tax Credits
• Overview
• What qualifies as R&D expenditure?
• HMRC enquiries
• Advanced Funding
• How EmpowerRD processes R&D claims
• Additional Sources of Government Funding
• Patent Box
• R&D Capital Allowances
• Q&A

3. © 2020 EmpowerRD Limited. All rights reserved.
R&D Tax
Credits

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Number of Claims / Year
0
12000
24000
36000
48000
60000
2007/8 2010/11 2013/14 2016/17
52.335
42.085
34.275
18.305
15.280
12.050
10.200
9.250
8.470
7.570
£81k
Average
London SME
Claim
£4.4bn
CLAIMED
IN 2016/17
20-40%
Eligible
Businesses
Claim
Key Facts and Figures

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R&D Claims 101
• SME / Large
• Qualifying VS supporting activity
• Claim documentary evidence requirements
• Claim time limits
• Grants
• Year ends filing process
• enhanced losses vs cash
• Subcontractors and EPWs
• Customer funded SME projects
• Reimbursed expenses (travel & otherwise)
• Software licenses

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Two Types of Claims
• The type of relief available to UK corporates under the R&D tax relief regime
depends on if the entity making a claim is classed as a small or medium enterprise
(“SME”) or Large
• The rate of relief is different dependent on whether the entity is an SME or Large
• There are also key difference in the type of costs that are eligible for relief under
each different regime
• An SME is defined as having less than 500 employees and annual turnover under
€100m or a balance sheet of not more than €86m
• Autonomous - no upstream or downstream shareholdings > 25%

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What Qualifies?
Non-qualifying
activities
Addressing
contractual
arrangements
Processing
intellectual
property
Marketing and
budgeting for
new product
Non direct
support
services such as
equipment
maintenance,
cleaning and
Design solely
for cosmetic and
aesthetic reasons
Commercial
& Concept
feasibility
analysis
Activities in relation to product
commercialisation (mastering,
production and distribution)
Other R&D entitlement
Improvements to
existing products
Customer Funded
Work
Duplicating an existing
process or technology in
a new way
Resolving
production
problems that
require R&D input
Testing activities
Process improvements
Management input to
project meetings
Services directly
supporting the
R&D project
Core R&D
Creating a new process,
material, device or product
Design and
Prototype Build
Scale up in production

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Evidence Required
Software
• Receipts or contracts for software
purchased, licensed or commissioned
• A copy of product/marketing literature
for the software
• Any evidence of charge back to R&D
Staffing costs
• PAYE records
• Records of pension payments
• List of R&D staff
• R&D staff’s timesheets (for those not
full time on the project)
• Contracts of employment for R&D staff
Externally provided workers
• Documentary evidence of the contract
or arrangement with the staff provider
• Copy of invoices received
• Evidence of payments - e.g. bank
records
• Details of the activities carried out and
any evidence of active supervision by
the company
Subcontract costs
• Invoices from subcontractors
• Evidence of the nature of the work
subcontracted and the terms
applicable. Evidence of payments

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HMRC Enquiries
• What is an enquiry?
• Why might I be selected?
• What does it mean for my claim?
• Before / during / after an enquiry
• Potential outcomes

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Advanced Funding
10
Advanced Funding allows you to access your R&D tax credit
early, by providing a loan against your future credit receipt.
EmpowerRD offers
advanced funding via
our EmpowerRD Now
service, which
delivers your funds as
soon as your claim is
submitted

11. © 2019 EmpowerRD Limited. Confidential. All
rights reserved.
EmpowerRD
EmpowerRD was founded with the belief
that too much government funding was
being taken by inefficient advisors who
weren’t incentivised to lower their cut.
We’ve used technology to radically change
the process of making an R&D claim:
making it more reliable, time-efficient and
cost-effective in the process.

12. 92% FIVE STAR REVIEWS
1000+CLAIMS
PROCESSED
100%SUCCESS RATE
£2.5m
LARGEST CLAIM
TO DATE
97.3%REPEAT
RATE
© 2020 EmpowerRD Limited. Confidential. All
rights reserved.
• Digital-first R&D Claims Advisor
• Expert advisors & online platform
• 2-3 times cheaper than traditional
advisors
• Receive your credit as soon as you
claim via EmpowerRD Now
How EmpowerRD Works

13. ”Although EmpowerRD only charged
us 5% of our credit, the whole
experience was actually much better
than with our previous advisor.”
Dan Jarrett, COO
Time saving - 36 hours | Cost saving - £15,500
“We found the combination of an online
platform and an expert advisor to be ideal for
our needs. The online platform made it much
easier to co-ordinate between the finance and
technical teams”
Sophia Green, Head of UK Finance
Increased claim by 291% | Time saving - 24 hours
Case Studies

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Additional
Government
Funding

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Patent Box
• What is it?
• Tax deductions for patent holders
• Reduces corporation tax to 10% on worldwide profits from patented
inventions
• Tax deduction can be applied retrospectively after patent granted
• Who can apply?
• The holder of a valid UK or EU patent
• Pharmaceutical SPCs
• Other non-tech sector IP rights-holders
• How to apply?
• Recommended to seek specialist tax advice on applying for PB
• The timing and use of patents can have a significant and complex
business impact

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R&D Capital Allowances
• What are they?
• Allows your to write down spending on fixed assets related to R&D
• Complements your R&D tax credit claim as it allows for claims on
fixed assets rather than expenses such as staff or consumables.
• Who can apply?
• Applies to any UK business investing in its facilities for R&D
• Applies to both office space but also internal systems supporting
R&D: such as server hardware, one-off software license.
• How to apply?
• Best claimed through your accountant.

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Q&A