R&D support for you

From our experience, businesses have preconceptions that they ‘don’t do’ R&D, or that it’s such a small investment that it’s not worth making a claim, but often it’s surprising how much a claim can be worth. Others are put off because they believe it’s only heavily scientific or technological projects that qualify – but that is simply not the case. As experts in R&D tax credit claims, BHP take a ‘step back’ to really focus clients on thinking about what R&D they carry out without even realising.

A company can save a further 26% of qualifying R&D spend where the company is profitable, on top of original expenditure, this is a Corporation Tax saving of 46% of R&D expenditure. Furthermore, where a company is loss making, a repayment can be claimed back from HMRC which is worth up to 33% of qualifying expenditure.

The incentive of R&D is to encourage innovation amongst UK businesses and at BHP we have a hugely successful track-record of working with companies to ensure they take full advantage of all the relief available to them.

The qualifying expenditure covers the cost of staff working on R&D projects, expenses relating to materials and equipment as well as costs for subcontractors that have assisted with such projects. Even R&D projects that have been unsuccessful are eligible for the relief.

With the introduction of a more generous R&D scheme for large companies and increasing awareness amongst companies and advisors of the scope of R&D relief available, the number of companies claiming R&D tax relief increased by 20% in 2016. The total R&D relief claimed in 2016 was £2.9bn, of which £1.3bn was paid to SMEs.

At BHP we welcome the opportunity to talk to businesses about exactly what they do in order to identify any qualifying R&D activity. Our aim is to make it easier for clients in a wide range of sectors to benefit from R&D tax relief. We have secured over £16m across a wide range of sectors, from manufacturing and technology to food & drink, in the last 2 years. A further £4m of tax savings have been achieved since COVID affected all our businesses.

Patent Box

In order to reward companies for driving innovation throughout the UK, since 1 April 2013, HMRC have offered a reduced rate of Corporation Tax for companies earning profits from exploiting Patents and Exclusive Licenses in which they helped develop the underlying invention.

Where a company has a qualifying Patent which generates income, the relevant profits which would normally be subject to Corporation Tax at 19% can be reduced to 10%. The aim of the government is to enable innovative companies to save money of their tax bill to enable them to reinvest into the next invention.

If your company holds a Patent, is considering applying for a Patent or has an Exclusive Licence to exploit a Patent, get in touch with one of our Patent Box experts or your normal BHP contact to find out more. It is likely that where a company owns a Patent, the company is also likely to be undertaking Research & Development and may also be able to claim valuable Research & Development Tax Credits.

For more information, give us a call on 0333 123 7171.

Meet the team to grow your business

Dean Pearson

Dean Pearson

Tax Partner

Kieron Batham-Tomkins

Kieron Batham-Tomkins

Tax Senior Manager

Chris Humphreys

Chris Humphreys

Tax Partner

Amanda Waterhouse

Amanda Waterhouse

Tax Partner

Mark Sleight

Mark Sleight

Corporate Tax Supervisor

Zoe Roberts

Zoe Roberts

Tax Partner

Ryan Wilkinson

Ryan Wilkinson

Manager