The document outlines the R&D tax relief scheme in the UK, highlighting that £1.2bn was returned to companies in 2012-2013, with many SMEs unaware of their eligibility. It describes qualifying activities for claiming tax credits and emphasizes that even loss-making businesses can benefit. The paper stresses the importance of accurately assessing qualifying R&D activities, which are complex in nature and require expertise beyond standard financial assessment.

1. Government Grant & Tax Consultants
R&D Tax Relief Overview
10/10/2013
10/10/2013
A member of the Experience Group
A member of the Experience Group

2. Government Grant & Tax Consultants
“Money won't buy happiness, but it will pay the salaries of
a large research staff to study the problem.”
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved
2

3. Government Grant & Tax Consultants
R&D Tax Credits
“The biggest single Government funding scheme for business”
 £1.2bn was given back to UK companies during 2012-2013.
 Over 12,000 companies benefited in the last financial year.
An est.90% of eligible SME’s have not claimed
The avg. annual SME claim is £43,000 p.a.
Straight to the bottom line of your business
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved

4. Government Grant & Tax Consultants
R&D Tax Credits
“Research is creating new knowledge.”
The scope of qualifying R&D activity is broader than most think
From projects seeking to achieve an advance in science and
technology, to activities that make an appreciable improvement to an
existing process, product, material, device or service through
scientific or technological changes.
 You can recover cancelled or failed project investment costs.
Loss making companies can claim as a cash credit or offset against
future profits.
95% of the companies we talk to didn’t realise they qualified,
until we identified claimable activity.
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved

5. Government Grant & Tax Consultants
R&D Tax Credits
“If we were certain of the outcome, it would not be called R&D
would it?”
For the SME market, the net cash benefit is unprecedented
Avg. annual claim is £43,000.
A potential £129,000 cash injection for your business.
Paid c.42 days from claim filing.
Claim every year with qualifying activity.
If you already claim? are you confident you are receiving
your full entitlement?
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved

6. Government Grant & Tax Consultants
R&D Tax Credits
 You probably qualify if you are:
•
A UK Ltd Company, trading 12 months or more, with PAYE staff.
• You do not have to be paying corporation tax
 AND do ANY of the following
•
Develop new or regularly change the way you make your
products or employ any staff with a technical or scientific
background.
•
Develop software, IT solutions or products in-house.
•
Develop and improve manufacturing processes or services.
•
Develop or appreciably improve products, materials or devices.
•
Develop samples, prototypes or undertake testing
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved

7. Government Grant & Tax Consultants
R&D Tax Credits
What is a technological advance?
NEW
TECHNICAL
KNOWELEGE
APPRECIABL
E
IMPROVEMEN
T
“Not readily available or
readily deducible by a
competent professional
working in the field.”
•Was it hard?
•Tell me Why?
NEW
CAPABILITIE
S
•Could your competitors
easily do it?
•Can you find the answer on
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved

8. Government Grant & Tax Consultants
R&D Tax Credits
A successful claim is based on its technological or scientific merits
& is not something that can easily be performed solely by the
company/ Finance department or by their accountants in isolation,
unlike many other aspects of company tax.
The scheme itself is complex and resource intensive
When Government introduced the scheme it decided HMRC would not
employ scientists or engineers to assess claim validity.
Their idea was that the technical staff performing the R&D or
innovation would be the ones best equipped to make the assessment
as to what actually qualifies for R&D Tax Credit relief.
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved

9. Government Grant & Tax Consultants
R&D Tax Credits
Job Title
PAYE staff or
Subcontractor
% Time on
Qualifying R&D
Activity
Qualifying £
2 x Developers or Engineers
2 x £35,000
50%
£35,000
IT or R&D Director
£50,000
30%
£15,000
MD
£100,000
5%
£5,000
Subcontractor Invoiced
Costs
£20,000 Invoice
65% of Fee
£13,000
Materials/Utilities/Prototypes
£12,000
TOTAL
£80,000
£80K qualifying R&D activity spend is “enhanced” by 125%
= £100K “pre-tax” scheme qualifying expenditure
At 20% small business C.Tax rate
R&D Tax Credit £20,000
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved

10. Government Grant & Tax Consultants
Government Grant and Tax Consultants Ltd
GGTC Ltd
21 Verulam Road
St Albans
AL3 4DG
www.ggtc.co.uk
Call us on: 01727 738602
Email: enquiries@ggtc.co.uk
Government Grant & Tax Consultants Ltd., 21 Verulam Road, St. Albans, Herts, AL3 4DG Tel. 01727 738600 Fax 01727 738609 www.ggtc.co.uk
Registered England 5852134 - This document and it's content is copyright of GGTC © 2011. All rights reserved