Frequently Answers & Questions
About R & D Tax Credits
What are they?
In essence a very valuable Latin taxo) is a mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or other legal entity) by a governmental organization in order to fund various public expenditures.”>tax break or relief for companies who perform or undertake activities or work that complies with HMRC’s qualifying criteria.
What’s its purpose?
It’s one of the ways in which the Government invests in businesses. Investing in businesses in the UK generates a cycle of innovation and productivity, including employment, home grown business success, exports to name a few, whilst also improving the economy and GDP of the Country.
What constitutes Qualifying Expenditure?
What types of costs can I claim against?
What could an R&D Claim be worth to me?
- A Cash Refund directly from HMRC
- A reduction in the Corporation Tax you would have to pay
- Eliminating your entire Corporation Tax liability
- Providing a Refund of Corporation Tax paid in previous years
- Offsetting future Corporation Tax liability
Cash refunds can be used to fund ongoing research and development or simply just provide cashflow or the ability to invest in growing your business
Is my Company missing out?
How far back can we claim?
How much time will I need to allocate?
Can I do my own R&D Tax Credit Claim?
In addition, our specialist knowledge enables us to uncover all cost areas that conform with the criteria and will yield the highest amount that you can claim.
We also understand and keep abreast of all the latest R&D legislation and HMRC rules meaning your claim receives the expertise gained over many years and 1000’s of claims. We also speak to HMRC daily and have a strong and proactive relationship with them.
Can you provide some examples of R&D areas?
- Designing / making Products or Solutions
- Ongoing Product Development / Enhancements
- Prototypes and Testing
- Applications and Platforms
- Software and Systems (incl. integration / customisation)
- Technical and Engineering Solutions
- New Processes and Procedures
Would my Business qualify?
Is there any minimum criteria?
You do not however need to be paying any Corporation Tax in order to qualify, nor do you even need to be revenue generating (really good for start-ups and companies taking a product/service/solution to market).
What is your success rate?
How long does the process take?
How long before HMRC determine my Claim?
Are R&D tax relief schemes considered tax avoidance?
About Capital Allowances
Can I claim Capital Allowances?
Yes, if you pay UK tax and own the freehold of a commercial property including furnished holiday lets or you have redeveloped a leased property and you have paid for the plant and machinery contained in the property.
What is commercial property?
Why is so little known about Capital Allowances?
The property is owned by my pension scheme, can I still claim?
Does claiming Capital Allowances affect my Capital Gains Tax position when I come to sell my property?
What can I claim Capital Allowances on?
I bought a Commercial Property more than 10 years ago, can I still claim?
Will my accountant have already claimed this for me?
How will HMRC be involved?
About Patent Box
What is a patent?
A patent is a licence or grant issued by the Government (specifically the Intellectual Property Office for UK patents) to the inventor that provides the individual/company with the right to prevent anyone from exploiting the invention.
Is there criteria for qualifying for a patent?
Yes. Patents can be applied to most areas of technology, however it would need to pass the initial ‘golden rules’, which are that:-
- It must be ‘novel’ – ie. can not be available or visible anywhere (eg. online / public domain) prior to the patent application being filed.
- It must ‘involve an inventive step’ – must contain technical differences to any current or similar inventions.
- It must be ‘susceptible of industrial application’ – ie. capable of being put into an industrial application.
What are the main reasons for having a Patent?
Although the primary reason is likely to be to guard against someone copying your invention, the tax incentives (ie. Patent Box) are now such that if you anticipate generating profits from the same, then investing in a patent at the outset could have a significant impact on the price you go to market at, funding or investment and of course your bottom line.
What income streams qualify?
Worldwide income on
- Sales of patented products
Products that incorporate patented items.
- Licence fees or royalties for rights granted over patents and associated IP.
- Income from the sale of patents, rights or exclusive licences.
- Income received from damages for patent infringement.
Please note that the above isn’t an exhaustive list and some have sub-criteria.
How far in advance should I plan?
What Patents qualify for Patent Box?
Primarily only UK Intellectual Property Office and European Patent Office patents qualify although patents from other EEA states may be eligible.
Should I apply for a Patent?
It depends on your circumstances and invention, but if you’ve invented something, then it is usually a good idea to protect it.
What is Patent Box?
Can I apply for a patent myself?
Absolutely. However patent applications are typically rather complex or moreover need to be specific and quite detailed in order to a) obtain a successful Patent and b) ensure that the protection afforded covers all the ‘elements and angles’ Ie. materials, variations and the various iterations your invention has undergone.
What are the Costs for a Patent?
The application fees and options are fixed by the governing bodies and jurisdictions (ie. the UK IPO or European EPO)
However the fees charged by Patent Lawyers to prepare the submission do vary, so its worth shopping around and of course will largely depend on the complexity of the invention.
Any other good advice?
- Patent Box is an opt-in benefit and must be applied for.
- The benefits will still accrue whilst your patent is pending.
- A company will need to claim the relief through their corporation tax return.
- A companies structure and any other reliefs claimed (eg. R&D) should be taken into account in order to achieve the most effective outcome.
- Do you need some advice – contact us now for a consultation.
- Can you recommend any Patent.
- Lawyers – for sure, we’ve worked with several that we are happy to recommend.