Tag Archives: Business News

Do I qualify for research and development tax credits?

What are research and development tax credits?

Research and development (R&D) tax credits are a government tax incentive for UK companies, especially small and medium sized enterprises (SMEs), designed to encourage investment in innovative products, processes and services.

The government announced in March 2017 at the Spring Budget its commitment to R&D tax incentives going forward, which is particularly helpful and reassuring post Brexit. There will be an additional £4.7 billion invested by 2020-21, which will include improving awareness of the R&D scheme amongst SMEs, as it is widely accepted by HM Revenue and Customs (HMRC) that only a small proportion of SMEs undertaking qualifying R&D have claimed the tax relief. This represents a significant opportunity for SMEs undertaking innovative activities that have yet to claim R&D tax credits.

What is it worth?

R&D tax credits are extremely valuable for SMEs and are worth the equivalent of up to 33% of a company’s R&D expenditure being available as a cash repayment from HMRC or reductions of tax bills.

What type of work qualifies for R&D?

Whilst the Government plans to increase certainty and simplicity around making R&D claims, currently HMRCs R&D conditions are very broad. Therefore, SMEs in most sectors and industries can potentially qualify for R&D tax relief.

If you are not sure if the project you are undertaking is scientifically or technologically feasible or you don’t know how to achieve the desired outcome, it is likely that your project will qualify for R&D tax relief. This is even the case where you have incurred expenditure but your project has not been successful.

The type of project work could include creating new products, services or in-house processes. It could also include significantly changing or adapting your current products, services or processes.

Basically, if you are doing something that your competitors are not doing and would be impressed by, there is a reasonable chance that it could qualify as an R&D activity.

What costs qualify?

The main cost is usually the salaries of people engaged in the R&D activity, including employer’s national insurance and any pension contributions. Other allowable costs typically include consumables, sub-contractor’s costs, software and some utility costs if these can be directly related to the R&D activities.

How we can help?

Here at PM+M we have a wealth of R&D experience and have made hundreds of successful claims on behalf of our clients. Each client and R&D project is unique, so at PM+M we offer a no obligation meeting with a member of our tax team. This allows us to understand your business and the type of project(s) you are working on, with a view to assisting you in starting to identify any qualifying R&D activities.

Below is a summary of our most recent R&D claims made on behalf of our clients:

  • Mattress manufacturer – unique mattress designs improving comfort and reducing heat retention. This claim resulted in a £50,000 tax refund from HMRC.
  • Classic Car Company – the company redesigned a continuation model of a 1950’s racing car which involved a complete overhaul of the internal setup of the car for safety purposes and making it road worthy. The claim resulted in a £60,000 tax refund from HMRC.

If you would like to discuss R&D or if you have questions, please contact Jonathan Cunningham (jonathan.cunningham@pmm.co.uk) or Claire Astley (claire.astley@pmm.co.uk)

Northern Powerhouse – Good News for Businesses

POWERFollowing on from the Autumn Statement last month, David Cameron and George Osborne have been in Manchester to set out their economic plan for North West England. George Osborne has promised substantial investment of a further £7 billion in the North.

Transport and logistics seem to be the main focus on developing the “northern powerhouse” with the aim to invest in the North’s roads. To reduce traffic jams, there will also be new trains with 20% more capacity, alongside the development of High Speed 3 (high speed rail link between Manchester and Leeds).

For business, there is a lot to gain from this announcement. With the investment in transport, the North will become a more attractive place to live and work. Another long term aim is to raise the employment rate in the region by creating new jobs through supporting the growth of new businesses. With funding available this goal looks to be very achievable.

Tim Mills, Corporate Finance Partner at PM+M said “This is an excellent plan on paper but care must be taken to ensure all parts of the region benefit.”

The North West is a great place to set up a business and with the continuing investment in the area it is an ideal time to re-locate or launch a venture.

If you would like more information on funding options please contact Tim Mills, PM+M Corporate Finance Partner.

Combatting Company Impersonation and Online Fraud

Online Fraud

The number of online scams targeting organisations and individuals has dramatically increased over the past couple of years. From phishing emails from contacts who are “stranded” and need money, to email tax rebate notifications, SMEs are being targeted more than ever.

The latest scam increasing in popularity is company impersonation and requests to change bank details. Although not a new technique, this scam is making a comeback, and can result in businesses paying large sums of money to the wrong person.

How the scam works

You receive a letter, seemingly from a supplier, asking you to change/amend/update their bank details for future transactions. The correspondence will appear genuine but, in reality, it has come from fraudsters.

Impact

The extent of the scam usually isn’t realised until the genuine supplier chases your accounts payable department for a missed payment. By this time, funds will have already left your bank, and can be very difficult and costly to recoup.

Protect yourself

Below are a few simple steps to avoid falling foul of this online fraud:

  • Compare letterheads from previous communications. Try and spot differences, however small they may seem.
  • Check the contact details on the communication. Are they consistent with prior correspondence received?
  • Call your supplier using details previously supplied, not the details given on the “fraudulent” correspondence.
  • Ensure that strict sign off procedures are in place internally and that more than one person reviews any changes.
  • Share your knowledge with your employees and your suppliers. The more people who are aware of how this type of fraud is committed, the easier it will be to detect.

For more information about company impersonation and other types of fraud, plus top tips on how you can protect yourself and your business, download the Metropolitan Police’s Little Book of Big Scams – The Business Edition.

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