Do you have a pre-conceived idea about your eligibility for R&D Tax Credits

Are you sitting comfortably? Then I’ll begin! I almost lost what turned out to be a really large claim for a Debt Collection business. I met Tony and Richard (not their real names) at the Really Simple Systems, first User Conference which was being held at Mercedes Benz World at Brooklands in Surrey.

I was a bit late and just about made it into the introductory session. We had another session and then broke for coffee at around 10.30. I got my cup of coffee and then went over to a table that Tony and Richard were sitting at, we exchanged a few pleasantries and the conversation turned to your typical “what do you do?” networking conversation.

Tony: We run a debt collection business! What do you do?

Me: I run a small tax consultancy. We help companies identify whether they have any projects eligible for the best tax relief available to a limited company, Research and Development Tax Relief. If they do have projects, we help them write a technical report and calculate the costs that they have incurred and liaise with their accountants to make the claim. But I don’t think I’ll be able to help you!

There it was, the near fatal mistake, assumption, the mother of all……

Tony: Why’s that then?

Me: Well, the companies we work with are involved in interesting projects, I don’t say innovative because that might put them off, with a scientific or technological challenge that they need to try and overcome. The best thing to look out for, that gives us something to work with are projects that have failed.

Richard; Projects that have failed? We’ve just spent around £400k on a telephone dialling system that doesn’t work, we scrapped the project and have spent another £300k on a replacement system that we have just about got working.

Me: (Slowly picking my jaw up from the floor) Really, that sounds very interesting! May be we should talk some more.

And the rest, as they say, is history

We spoke some more, said goodbye at the end of the day, I got in my car to drive home, they got a lift to Biggin Hill and then flew back to Yorkshire. I drove up a few weeks later, got a lot more information on their projects, prepared a claim for them, got them back around £200k and they were my second biggest client of that financial year. We’ve done a bit more work for them since.

On a slightly different note, the picture that accompanies this article is the old Mine Manager’s house at the Gypsum mines outside Battle in East Sussex. The house was for many years home to an extremely innovative business that was spending upwards of £500k on R&D and was a leader in an EU Funded Horizon 2020 project developing a system to identify minor damages to bottles in a production line. The company operated in the Photonics industry, which together with business in the High and Ultra-High Vacuum industry has a cluster around the Hastings & Rother area. Sadly, the business is no more, but it claimed over £400k in R&D Tax Relief for its projects, in the 4 years that we were working with them.

Are you eligible?

If you’ve ever heard me talk about R&D, the “eligibility” part of the talk has been inspired by these two businesses. And if you haven’t heard me talk, I’ll be at the Business Show at London Excel in November, doing a talk.

It doesn’t matter what industry you are in, where your workplace is or what it looks like. There are only three eligibility criteria.

1. Are you a Limited Company?

2. Is your company a going concern?

3. Has your business been advancing science or technology through the resolution of scientific or technological uncertainty? In other words, have you tried to do something that is difficult! You don’t have to have a laboratory! You don’t have to operate from a high-tech facility and you don’t have to be a Rocket Scientist!

If this article has piqued your interest and you would like to discuss a project with me on a no-obligation basis, please feel free to arrange a 15 minute conversation with me at a time that suits you at www.calendly.com/cooden/discovery-nelguide or call me on 01424 225345