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