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Sam stephens
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- 2. The UK: AGreat 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 tothe 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 July2019 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 August2019 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 DevelopmentFunding 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 TopTips 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&DTax 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 differentR&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 theSME 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 companytax 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&Dcosts 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&Dfor 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&Dfor 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 CreditsTop 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 CorporationTax 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 consultantswork 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
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