This document provides information about funding and tax incentive programs in the UK to support innovation and research and development. It discusses the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS) which provide tax relief for equity investments in small companies. It also summarizes R&D tax credits that reward innovation, the Patent Box that lowers taxes on profits from patented inventions, and various grant programs from Innovate UK including Smart Grants. The document provides guidance on eligibility and claiming these different innovation support programs in the UK.

1. Hello

2. The UK: A Great Place to Innovate
R&D Grants
Pump Priming
Innovation
SEIS/EIS
Gets things
started
R&D
Tax Credits
Rewarding
Innovation
Patent Box
Rewards
Commercialisation

3. SEIS and EIS – Equity Funding
For early stage companies
▪ Offers 50% tax relief to investors who
buy new shares in your company
▪ Capital Gains Tax (CGT) exemption on
gains from SEIS investment
▪ Maximum of £150,000 through SEIS
investments
For small, high-risk companies
▪ Offers 30% tax relief to investors who buy
new shares in your company
▪ Raise up to £5 million each year and a
maximum of £12 million in companies
lifetime
▪ Investment must be made within 7 years
of companies first commercial sale

4. An intro to the UK/EU Funding Landscape
▪ SME Instrument
▪ Fast-Track to Innovation (FTI)
▪ Future and Emerging Technologies (FET)
▪ Smart Grants (formally Open Grants)
▪ Innovation Loans
▪ ISCF (Industry Strategy Challenge Fund)
▪ Themed Competitions
▪ Involved with outside organisations to
provide funding e.g. Coeliac UK, APC UK
▪ SBRI Competitions

5. Closing Date:
24th July 2019
Innovate UK: Smart Grants: April 2019
R&D Funding for disruptive innovative projects in any industry sector
Innovation
leading to new
product,
process or
services
A strong and
deliverable
business plan
Clear &
anticipated
growth impact
leading to
significant ROI
Projects must demonstrate:
Feasibility
Studies
(including
market
research)
Industrial
Research
Experimental
Development
Projects can focus on:

6. Closing Date:
21st August 2019
Innovate UK
UK & USA: Innovation in Global Composites Market
Innovation
leading to new
product,
process or
services
A strong and
deliverable
business plan
Clear &
anticipated
growth impact
leading to
significant ROI
Projects must demonstrate:
Industrial
Research
Experimental
Development
Projects can focus on:

7. e.g. Innovate UK – Smart Grants: April 2019
Funding Timeline

8. Research and Development Funding
30th November 2017
Wider UK Funding
Collaborative R&D projects with partners
from EUREKA countries.
Current Competitions:
▪ AI & Quantum Technologies
▪ Photonics for Advanced Manufacturing
For innovative solutions to UK Defence
and Security challenges.
▪ Open Call for Innovation
▪ Themed Competitions

9. Grant Funding Top Tips
Read and
understand the
competition
criteria
Attend briefing
event and
register interest
Agree a costed
and expanded
plan ASAP
Get partner
commitment
early
Answer all
questions and
bullet points
Leave plenty of
time for writing,
review and
uploading

10. What are R&D Tax Credits?
The R&D tax
credit scheme is
a HMRC
incentive
designed to
inspire
innovation &
increase
spending on R&D activities by
companies
operating in the
UK.

11. The 2 different R&D Tax Credit Schemes
▪ Less than 500 employees or less than
€100 million turnover.
▪ Benefit of £26 per £100 on R&D if profit
making
▪ Benefit of £33 per £100 on R&D if loss
making
▪ Claims can go back 2 full years
▪ Over 500 employees or more than €100
million turnover.
▪ No minimum R&D spend
▪ No upper limits on claims
▪ Benefit of £9.70 per £100 on R&D

12. How does the SME scheme work?
No R&D Claim With R&D Claim
Turnover £100,000 £100,000
Costs £50,000 £50,000
R&D Costs £20,000 £20,000
Net Profit £30,000 £30,000
R&D Uplift @ 130% £26,000
New NP for Tax £30,000 £4,000
Tax @ 20% £6,000 £800
To take home £24,000 £29,200
Benefit £5,200
Or, Benefit of £5,200/R&D Costs of £20,000 = 26%

13. 2 full company tax years plus current one
Carry losses forward
Revenue & Intangibles costs only
31st Dec 1931st Dec 16 31st Dec 17 31st Dec 18
Must be claimed by
31/12/19
Generates Tax Repayment or
extended losses
Company tax year 2 Company tax year 1 Current company tax year
Must be claimed by anniversary
of accounts submission to
generate repayable credit
R&D Tax Credits: The Timeline

14. Uplift of R&D costs
offset against company
profits reducing tax
payable – worth 25p in
the £1
Reviewing earlier years
R&D activity, Uplift of
R&D costs reduce
profits in those years
and create tax refund.
Carry losses backwards
Loss making company
can claim up to 33p in
the £1
CASH BACK
TAX REDUCTION
Uplift of R&D costs pushes
company into loss, use to extend
losses against future profitability
– good for near to market R&D
companies
R&D Tax Credits: Why Bother?

15. What is R&D for tax purposes?
Activities that seek to:
▪ Achieve an advance in overall knowledge or
capability in the field of science or technology
and
▪ Resolve scientific or technical uncertainty

16. R&D Tax Credits: Are we eligible?
You are likely to be eligible to claim if you are working on:

17. What is R&D for tax purposes?
Prototypes
Test Rigs
New Device
New Process
Customer Funded work
First in Class
R&D for Production
issues
Technical Process
Enhancements
Beta Trials
Project Management
Management Input to
R&D
Product Improvements
Duplicating Existing
Products in a new way
Prototype Tooling
The Lab Coats The Engineers
IP Processing
Rent, Rates,
Depreciation
Concept and Idea
Analysis
Cosmetic and Aesthetic
Work
Marketing & Product
Launch Costs
Finessing Production
Issues
The Marketers

18. R&D Tax Credits: What can be claimed?

19. R&D Tax Credits: IP Ownership
You have completed R&D work for a client. To work out if you can claim, you
need to answer 2 questions…
What is the size of your
client?
Your
Client
You
You can claim R&D Tax
Credits via SME Scheme!
No claim to be
made.
SME Large
You can claim R&D Tax
Credits via RDEC
Scheme!
Who owns the
IP?

20. R&D Tax Credits Top Tips
Consider work
you have
completed for
clients
Compliance
with legislation
can still lead to
innovation
Have you
installed new
production
lines?
You can still
claim R&D tax
credits if your
project was
grant funded
Not all
accountants
understand the
subtleties of the
scheme

21. A reduction in
Corporation Tax
on profits from
patented
inventions
Can reduce
Corporation
Tax to 10%
UK and EU
Patent Office +
other EU
Economic Area
Products and
Processes that
are patented
Elect for Patent
Box within 2
years of
accounting
period
A cash resourced company innovates and creates IP
Patent Box

22. TBAT’s Success
Our consultants work tirelessly to maintain our impressive success rates; allowing our
clients to stay competitive in their sector and continue to innovate!!
Sam Stephens | Director | 01332 819740 | sams@tbat.co.uk

23. Q&A

24. Thank You