That sentence alone feels strange to write, not least because when I started, R&D Tax Relief was barely understood, rarely claimed and every single claim I worked on went straight into an HMRC enquiry. More recently, first with COVID, then the Mandatory Random Enquiry Programme and finally the dissolution of the SME scheme, many a mere mortal has given up and moved on!

As a result, there aren’t many voices in this industry who can say that! Whilst I had been working in accountancy from 1996, the R&D Tax Relief legislation was established in 2000 but it wasn’t until 2006, that I was involved in the submission and defence of an actual R&D Tax Relief claim.

Over the last two decades I’ve worked in:

a large regional accountancy practice,
industry (including clinical research and motorsport),
and, since 2013, as founder of Cooden – R&D Tax Specialists.

I’ve seen the regime evolve from something obscure and under‑policed, through a long period of expansion, to the far more tightly controlled (and less rewarding) environment we operate in today.

I’ve also seen:

how poor advice damages good businesses,
how fraud distorts policy responses,
and how legitimate claimants get caught in the crossfire.

Over the next three months, I’m going to share a short series of articles reflecting on:

The early years, when every claim had an enquiry and why that was a good thing
Setting up Cooden in 2013, and what specialising actually means
COVID, fraud, and HMRC’s reaction, including Mandatory Random Enquiries
Where we are now, and what the future of R&D Tax Relief should look like

If you’ve ever made an R&D claim, or decided not to, I hope you’ll find something useful in what follows.

Part One – When Every R&D Claim Had an Enquiry (and Why That Made Me Better)
When I first started working on R&D Tax Relief claims in 2006, there was one certainty:

Every claim faced an HMRC Enquiry.

No exceptions.

At the time, R&D Tax Relief was poorly understood by advisers, accountants and businesses themselves. The guidance was thinner, the case law almost non‑existent, and expectations were rarely aligned.

Those enquiries were uncomfortable for me and the company being enquired into (which was often my employer).

They were slow, they were detailed and yet they were invaluable.

What the Enquiries Taught Me
Each enquiry forced me to confront three realities early in my career:

HMRC don’t enquire because they’re hostile, they enquire because they don’t understand or at least back then, they wanted to educate.
The scientific or technology information matters more than the numbers (although they are still pretty important)
Evidence beats confidence every time!

In these early years an enquiry was mainly focused on education. My experience was that if a company was making a claim for the first time, it would face an enquiry. HMRC would be able to establish whether the claimant’s R&D was genuine and whether the people within/ or without the company making the claim understood how to prepare the claim.

There were specialist units set up across the country, the volume of claims especially from SMEs was low and HMRC had teams at these units who, whilst they weren’t technical or scientific specialists, had bothered to take an interest in particular areas and if a claim came up from a company operating in one of those areas, they would be able to ask intelligent questions. They would guide the company and the advisor on what they were looking for and if any report was lacking, or more likely there was no report, they would seek to understand what the claimant had been doing. It is a far cry from what we have seen in the current climate.

Sometimes they would even increase the value of the claim, or as was the case when I was working in Clinical Research, they would help to get overseas hospitals and universities added to “The Prescribed Bodies list” retrospectively. I always get a little thrill when I look back at that list and see Universities and Hospitals with a registration date of 12th October 2010. Unfortunately, with the changes to the rules on Overseas Subcontracting, that list will be confined to a “404 error” before too long! I may just have to download it for posterity!

During this time, I learned quickly that:

labelling something as “innovative” wasn’t enough,
accounting justifications without technical substance fell apart, and
vague descriptions of “development work” simply didn’t survive questioning.

I will be clear that the claim that I was involved in in accountancy had a very limited technical report and the claims I prepared whilst working in the clinical research business were purely numbers, I was relying heavily on the fact that DTI had issued some guidelines similar to those now found at CIRD 81920.

What I came to understand as I moved from industry and into the world of consultancy was that claims needed:

a clear technological baseline,
genuine scientific and or technological uncertainty, and,
an explanation that a competent professional would recognise as R&D

This was brought home to me, with brutal reality, when I asked an external advisor to support me with the first claim for the motorsport company as it had to be prepared within 2 months of my starting work there and I was out of my depth. The advisor produced an 80-page report, which opened my eyes to what was really required and you know what, yes you’ve guessed it…..

even that faced an HMRC enquiry!

One Definition I’ve Kept Ever Since
Those early years shaped a definition I still use today:

A successful R&D claim is not one that gets paid quickly — it’s one that withstands an enquiry.
And yes, that does align with HMRC policy on talking about “Successful claims”!

That definition has guided every claim, whether in clinical research managing multi‑million‑pound claims, motorsport engineering, or later when I set up Cooden.

In later articles, I’ll come back to why this matters more than ever in today’s compliance environment.

I hope you’ll come back for Part 2 at the end of May!

The post Celebrating 20 Years in R&D Tax Relief: My Story so Far! appeared first on Cooden Tax Consulting.

It covers things such as:

• Qualifying conditions
• Eligible costs
• Differences between the SME Scheme and RDEC
• How to treat R&D expenditure covered by a grant or a subsidy
• How despite Brexit, EU rules are still applied to the definition of an SME and the amount of repayable tax credits that can be paid

You can do it yourself

You can take the chance, you might get lucky, HMRC are stretched when it comes to reviewing R&D Tax Relief claims, you might get lucky for three or four years, but then HMRC might look at a claim, it looks slightly higher than what they have come to expect. They open an enquiry into your last claim, they ask you a number of questions about how you determined that the work you were undertaking represented a global advance in science or technology. The explanation you provide doesn’t quite convince them, they think that you are just improving your own knowledge and capability, they decide as a result to open an enquiry into all of the other claims you have filed for exactly the same reason, the £150,000 that you have claimed and spent over the last four years, suddenly needs to be repaid, you don’t have it!

Am I scaring you? It’s not completely unintentional, but it could happen. However, worse still is it could still happen even if you have employed an R&D Tax Relief Consultant. Not all companies purporting to be R&D Tax Credit Experts will continue to support you in the event of an enquiry, some will work on a fixed fee and then leave you to pick up the pieces or pay a lot more to them to support you with an enquiry. It’s not all of them, but there are some!

We won’t leave you in the lurch

Our “No Claim, No Fee” promise means that we don’t get paid if your claim is unsuccessful, it also means that we will defend your claim through an enquiry with HM Revenue and Customs, if that claim is retrospective and after you have received a refund, we will reduce our fee if the enquiry reduces the value of the claim. To date we have claimed around £20m for companies of all shapes and sizes, our largest claim has been over £1m our smallest about £2,000, in the 8 years the company has been operating our claims have been enquired into 6 times, we have defended them all successfully and more than 99% of the costs that we have claimed have been accepted. In fact our first ever piece of work was to help a company with an ongoing enquiry to successfully close it by examining the corporate structure and during the enquiry we noticed that the company hadn’t claimed for subcontractor costs in their claim, which enhanced it by a further £30,000.

If you work with the right Tax Consultant your risks are greatly reduced, it is absolutely not risk free, but the risks are shared, but the knowledge and expertise that you gain, may not only increase the value of your claims, but it may also give you additional piece of mind.

To start your R&D Tax Credit journey with an R&D expert, you can book a free, no obligation discovery call at 01424 225345.

The post Why do you need a R&D Tax Consultant? appeared first on Cooden Tax Consulting.

If your company had a financial year end of 31 March 2024, and you haven’t claimed R&D Tax Relief before or you haven’t submitted a claim between 1^st October 2021 and 30^th September 2024, then you will need to notify HMRC of your intention to claim, by 30^th September 2024.

If you don’t your claim won’t be accepted. It’s also not a fixed deadline as it will be relevant for every month going forward so a 30th April 2024 year-end will need to pre-notify by 30th October 2024 and 31st December 2024 year-end by 30^th June 2025.

If you think you might be considering a claim, then you really need to make sure you have pre-notified HMRC by 30^th September if you are a company with a March year-end.

The rules are further complicated by disallowing a claim made on an amended tax return (a second filing) to include an R&D Claim that was submitted in the period between 1^st April 2023 and 30^th September 2024. So, if you filed an amended claim for 31^st March 2022 after 1^st April 2023 and you haven’t yet submitted your 31^st March 2023 claim or you submitted it after 1^st April 2024, you will need to pre-notify HMRC.

Confused? We were!

Whether they have complicated the rules to catch people out we don’t know, but they are complicated.

Not sure where to start? Well you can try here, but it doesn’t reference the disallowing of amended R&D Claims, so if you’re still not sure or if you don’t have access to your online tax account, why not send us an e-mail or give us a call and we can help you with that. You don’t even have to use us for your R&D claim.

We’ll have a quick chat about your projects, we’ll need a bit of information about the business, some dates and names and reference numbers and we’ll prepare and submit your notification form.

There’ll be a small fee! £350!

You may subsequently decide not to prepare a claim, or you might ask us to prepare a claim and in our more detailed look at your projects, we might say there isn’t scope for a claim as your projects don’t meet the requirements, or there isn’t sufficient cost to make it viable for either of us.

If you do go on to use our full R&D Tax Relief service, we’ll discount our final fee to remove the cost of the original notification.

That’s fair, isn’t it?

The post 30 September – Massive deadline for R&D Tax Relief Claimants appeared first on Cooden Tax Consulting.

R&D Tax Relief is a cost-based tax relief that is designed to reward companies undertaking a project that seeks an advance in science or technology through the resolution of scientific or technological uncertainty, you can read more about whether your projects qualify here.

There are now only two streams that are almost identical, with one significant difference and one largely insignificant difference to eligible expenditure. There are different qualifying criteria for each stream, and it is the qualifying criteria that create the biggest difference, and there is of course a significant difference in the financial benefits associated with each stream.

The SME Scheme is the stream for Small & Medium-sized Entities, generally, these are companies that are performing R&D for their own benefit and spending their own money. However, in some cases, they may be performing the R&D with an expected customer in mind, having identified a market need or been approached by a customer with a specific requirement, but in these circumstances, it is important to understand the contractual relationship between the SME and its customer. The work cannot be “subcontracted” to the SME, nor can it be “subsidised” by the customer. The subcontracted element would be a contractual relationship that sees the customer pay the SME for time and materials spent in developing the product. The subsidised element is one that HMRC have been pursuing recently and focusing on the commercial terms of milestone-based projects, a significant upfront payment on contract signature, might be seen as a way of subsidizing the R&D expenditure to be performed by the SME, which would then make a claim for R&D Tax Relief under the SME Scheme unviable due to the subsidy.

To qualify as a SME, the company must:

• employ less than 500 full time equivalent staff (including staff within group companies); and
• have a Turnover less than €100m; or
• have gross assets of less than €86m on the Balance Sheet

In essence a SME can be a pretty significant business. Claims under the SME scheme for a company that is in profit will generate a tax saving of up to 24.7% of the eligible expenditure, whereas a loss-making SME is able to surrender their losses for a repayable R&D Tax Credit worth up to 33.35% of their eligible expenditure.

The Research and Development Expenditure Credit stream is for businesses that don’t qualify as an SME, it also covers R&D performed by an SME for work subcontracted to it by a Large company, by an overseas entity or by an entity in the UK not chargeable to corporation tax. An SME that has also had its expenditure subsidised by either a grant, subsidy or by significant upfront payments from a customer, will be able to claim under the less rewarding RDEC stream. The tax saving under the RDEC scheme is currently 10.53% of eligible expenditure incurred after 1 April 2020, prior to that it had been worth 9.72%.

So those are the differences between the two streams, but there are still the differences between the two sets of eligible expenditure. If we look at the eligible costs for the SME Scheme, then we can discuss the one element that can’t be claimed under the RDEC stream and then the one element that can only be claimed through RDEC.

The eligible costs for the SME scheme are:

• Staff Costs – wages, salaries, bonuses, employers social security (NI) and employers pension contributions
• Subcontractors – work subcontracted out to another company on a time and materials basis;
• Externally Provided Workers – named individuals normally engaged through an agency or a connected staff provider, but not always;
• Materials – materials consumed during the research and development, including in prototypes, but only where the prototype is not intended for sale and they cannot be removed from the prototype and used in another project;
• Utilities – payments for light, heat and water, consumed in the R&D process;
• Software – both purchased and developed to support the R&D process;
• Payments to Clinical Trial Volunteers – not applicable to most claims, but perhaps very of the moment in these current times; and
• Connected Companies – payments to connected companies for all of the above costs apart from further sub-contracted costs.

Under the RDEC scheme, one additional expense that can be claimed is “Contributions to independent research.” This refers to payments made to a qualifying body to conduct research and development of their own choosing. However, it’s important to note that work subcontracted to an SME cannot be claimed under RDEC, as the SME is eligible to claim for the subcontracted work themselves.

Despite these nuances, the similarities between the two streams are greater than the differences. If you’re unsure about your eligibility or which scheme to claim under, feel free to reach out for a chat. You can book a free, no-obligation discussion with me at https://calendly.com/cooden/discovery-website to determine in 15 minutes whether your company and project qualify. Alternatively, you can call us at 01424 225345.

The post SME v RDEC: What are the differences? appeared first on Cooden Tax Consulting.

Every Autumn, around the end of September or in early October, the Office for National Statistics and HMRC distribute their annual review of the R&D Tax Relief Scheme. This year, they are reporting on claims for the tax year ended 31 March 2020, so “pre-pandemic”, based on claims processed up 30 June 2021, but in what I believe to be a change to recent years, they are also forecasting estimates for returns not yet filed within the figures, which allows for a far better comparison.

A company with a 31 March 2020 year end has until 31 March 2021 to submit an initial tax return which for regular claimants would normally include their claim for the year, but a company has until 31 March 2022 to submit their claim on an amended tax return, regardless of whether they are a regular or new claimant.

Estimated claims have continue to rise

Based on claims received to 30^th June 2021, HMRC estimate that there will be a total of 85,900 claims filed for the year to March 2020 of which 76,225 were under the SME Scheme, so 9,675 were Research and Development Expenditure Credit claims of which more than half (5,305) were from SMEs as subcontractors or who had been the beneficiaries of grants or subsidies for their R&D activity. The scheme has delivered £7.4bn of R&D Tax Relief support to claimant companies, who between them have spent more than £47.5bn on R&D.

Based on these current estimated figures the number of claimants has increased by 16% and the amount claimed in total has increased by 19%. It will be interesting to compare these figures with next years for the period of the pandemic, our experience tells us that there has been significant interest in Research and Development Tax Relief as companies have come out of the other side of the pandemic and been keen to secure additional cashflow from legitimate claims.

Of the £7.4bn claimed £4.4bn has been claimed under the SME scheme making the average SME Scheme claim worth around £57,700, with the median claim a more realistic comparator for first time claimants being £21,500. 63.5% of the £4.4bn paid out for SME scheme claims was for the payable tax credits, by surrendering a current year tax loss.

Where and who are the largest claimers?

The bulk of the claims have come from Companies with their registered office in London and the South East, 35% of the claims and 49% of the value of claims have come from these regions, however these may not necessarily reflect where the R&D is happening.

The three largest sectors for claims remain as Information and Communication, Manufacturing and Professional, Scientific and Technical, between them they make up more than 63% of the claims and more than 69% of the value of claims.

72% of claims were under £50k and the largest number of claims, nearly 15,000 featured in the up to £5k band of tax relief.

Why is it relevant to my business?

We know from our own experience, and these statistics confirm, that there are a large number of companies who are significantly involved in Research and Development activity. However, we also know that many companies are continuing to miss out on claiming for projects that they either undertake in house or subcontract out to others. This is borne out by the statistics, where in the previous year to 31 March 2019, they show that there were nearly 20,000 new claimants. The provisional number of new claimants to March 2020 Is just over 10,000, this is merely a timing difference and not the result of “peak new claimants”.

With the ongoing challenges around recovery in a post-COVID-19 world, shouldn’t you really be looking into whether you can be making a claim? What would your company do with the cash if you were claiming, the median the tax saving of around £21.5k, or the average saving of around £58k? How would those plans change if you found out that your claim was more than £100k, do you have some new machinery you’re looking to install or another new product in the pipeline, awaiting some funding before development can start?

It’s never too late to start

A significant tax saving can make a huge difference to a business. If your company has a December 2019 year end, you have until the end of this calendar year to make a claim, but realistically, you have until the week before Christmas for it to be submitted. It takes us about two weeks from initial discussion to prepare a claim for a highly motivated company.

Why not contact us to find out whether you can be a part of the statistics next year? You can book a free, no obligation #FindOutinFifteenMinutes discovery call with our Director, Simon Bulteel. What’s the worst thing that can happen if he says no after those 15 minutes? Now compare that to receiving a refund of overpaid tax!

Book a call now! 

The post Research and Development Tax Relief statistics are out! appeared first on Cooden Tax Consulting.

Tensei think it is ‘Smart to use what is wasted and not waste what is precious’.

This nugget of a company was founded by Annabelle Cox, previously co-founder of SCIN, the UK’s largest materials library and resource based in London, Clerkenwell.  Curiosity and Systemic Design has fuelled her relationship with business.  Early 2013 and on the back of an exhibition at SCIN showcasing materials development inspired by the farm, she realised that there was potentially an opportunity to create technical materials, notably papers, from straw.  Historically, straw has been used in Indo-China as a substitute for wood pulp. Adoption in the West though is another story and for good reason, there was plenty of forestry.

Fast forward to 2016 and change rides wildly into town as the perfect storm of shifting societal habits, resource constraint, climate change and plastic ‘non gratis’ colluded to Tensei’s benefit. We needed and need to look to pastures new and ironically, some answers lie in the field.

So why was this so interesting for Tensei? In a nutshell, Tensei researches, develops, and produces smart and or useful pulps, materials and products using biological systems, notably crop waste, biowaste and grasses.

This may sound simple and to an extent it is but the ‘to do’ list to make change happen for comfortable global adoption of these fibres is extensive: consistency, quality, supply, accreditation are some of the interesting headers.

Whilst Tensei are working hard to supply some of the answers, in part through a new technology platform to deliver on those requirements for adoption, they appreciate that for any innovation to succeed, it needs to work within current operating systems first before it can stretch its legs. Tensei’s approach therefore is to gently tickle Industry into making the change. For example, Tensei specifically work using commercially available pulps at this stage – wheat, bagasse, hemp, jute, bamboo, rice straw, cotton linters, flax but in the future, this will extend to a broader base of fibre from multiple bio waste streams.

To put it into greater context, the paper and board pulp market is currently about 431million tonnes of which non-wood is roughly 3% of the market – 12 million tonnes. ( source FAO)  Yet there is roughly 2.5 billion tonnes of uncollected straw estimated to be available.

A scalable, financially profitable business is of course important but the endemic spirit driving this is the need for the global economy to see the opportunity afforded by this raw material source. It is yet to become the ‘Go to’ material of choice but it waits quietly in the wings. Tensei is one of the drivers towards mainstream adoption of straw or crop waste as a viable, albeit different, resource for multiple industries from packaging to bio composites, textiles to chemicals.

Tensei is diaphanous:  part synthetic biology, part tech and full on environmental in its positioning as a company and ethos.

It sits between ‘Impactful’ and tech. Almost like a person yearning for mindfulness but with formula 1 elbow tweaking.  Like many emerging companies, Tensei is part of the global bioeconomy and according to Forbes:

“The global bioeconomy is about to take off as manufacturers choose biology as the method of choice to efficiently produce high-performance, sustainable products. Synthetic biology is at leading edge of this $4 trillion gold rush”

Part of Tensei’s offering is product based, this helps it to embark on its own R&D projects and demonstrate how it can also commercialise innovation for its customers. To date, Tensei has developed its own papers for food and drink: absorbent papers for uses ranging from pads in soft fruit punnets, bakery and in the future meat, fish and poultry, takeaways. and new recyclable coated laminate papers for a range of products from straws to crisp bags.

So, for those that want to future proof and deliver a genuinely impactful set of product solutions Tensei would love to help solve problems ranging from alternative solutions to plastic to what to do to valorise biowaste. The crop harvest is no longer just about food, it may even one day form part of a satellite construct orbiting earth. For more information on Tensei, visit www.tensei.co.uk.

Tensei have so far been able to claim around £30k for their historic R&D efforts and we are currently preparing claims for more, which will no doubt be used to fund future R&D that this innovative business, with an alternative idea, still has to undertake to widen their product portfolio.

Arrange a “Find Out in Fifteen” discovery session to determine your eligibility to claim. Book a call now!

The post Hello world – meet Tensei appeared first on Cooden Tax Consulting.

Mmmm, well, that’s not really what’s happened over the last 15 months with Covid and all that we have endured as a nation, and to a certain extent as one humanity. When you throw the ongoing impacts of Brexit into the mix as well, I suppose there is some belief at least that the latter part of the headline might actually be true!

However, here in the UK things are beginning to look up. The vaccine roll out continues at pace, being in the 45-49 year old category, I’ve just booked my first jab, I think I may well have had it by the time you get round to reading this! We’re able to go and have a beverage in a pub garden, we can meet outside as either two households or six people and we can finally have our hair cut. The last time my barnet was trimmed was the start of November, just before lockdown 2! It’s a mess and it’s got a lot more grey in it.

And yet despite all of this in our private lives, for many in the food and drink industry your working lives may have changed a bit but the demand for products and services has been maintained, although for some of you, that may be in a slightly different format.

With change comes innovation, and in the UK and a few other countries around the world, with innovation comes tax relief. Now not all innovation is worthy of tax relief, but there are significant elements that do reach the criteria for tax relief.

Developing new products, processes, materials and devices, or significantly improving existing ones could all qualify. The bar requires that a competent professional operating in the field couldn’t have readily deduced the solution, or a group of people having a discussion couldn’t come up with it quickly. Ultimately if it required significant thinking time, then there is some scope to claiming.

It could be that during the pandemic, shortages existed in the supply chain and yet demand for your product continued. If you had to significantly adapt a recipe, by going beyond an established substitution of one product for another and you had to experiment to ensure that there were no discernible differences between the end products, and this required, research and batch trials, you could have a claim.

It’s not just in food and beverage production that there is scope to claim, it’s the development of machinery, processing equipment, cookers, dryers. How you grow the crops and develop new varietals that may be more hardy or resilient to pests, need less fertiliser or treatment during the year.

It can be a real pain trying to establish for yourself whether you think what you have done meets the criteria. There are pages and pages of notes on HMRC’s website, if you’ve never looked, if I’ve piqued your interest you can go to HMRC Internal Manuals or just search for “CIRD80000” in Google or Bing.

Or you could just be brave and say, I don’t need to know that level of detail for myself, I just want to talk to someone about our project or projects, that does know that level of detail because that’s what they do. Well, you’re in the right place, right now.

Get in touch today and book a “Find out in 15 minutes” discovery call with me, there’s no obligation, if you just want to find out if you might be able to claim and go and do it for yourself, be my guest. Good luck! Speak Soon!

The post What innovation or opportunities have arisen in your business? appeared first on Cooden Tax Consulting.

As we have started the new year with encouraging news about vaccines and hopefully a more positive outlook on the year ahead than perhaps we might have had six months ago, when many business owners thoughts were more focused on survival, it’s important to refocus on those sustainability goals that many businesses have.

We’ve been trying to work out how to make our tax consultancy more “Sustainable”, but its difficult, we work from a serviced office so have little impact on the choices of services. We come to work and travelled to our clients through a mixture of train and car, we could use cars less, but they are convenient but haven’t done so since lockdown. Since the onset of the first lockdown we have made use of services like Zoom and MS Teams to keep interacting with our customers.

So perhaps in a way, we have stumbled into being slightly more sustainable, will we maintain this as we come out of the other side of Covid? Who knows? It’s difficult not being on a client’s premises, certainly when it comes to the engineering and manufacturing sectors that we support with Research and Development Tax Credit claims, being on site gives you a feel for what’s going on, especially if you have a curious nature which we tend to have, because of what we do. When we ask questions based on what we see, hear and feel, generally speaking the potential to claim increases.

Sustainability doesn’t have to be expensive, it doesn’t have to be huge grand gestures, it will be the sum of all of the little changes that we make in both our personal lives and in business that will be greater than the whole.

That being said, if in business you are looking for that one big project, that world beating new piece of technology, or an idea to revolutionise the agricultural industry or the renewables industry, or to reduce waste, then it might be expensive, it might be time consuming, but there are plenty of ways that you can find support from government.

Business funding opportunities

There are a number of competitive grant schemes that have these sustainable elements at the core, you only have to check out UK Research and Innovation  (www.ukri.org) where there are over 100 opportunities for business funding. Granted not all of them are focused on sustainability but there will be a significant number, particularly with the advent of the government’s Industrial Strategy and its continuing signals that in the new post-Brexit world, we won’t be left behind when it comes to research and innovation.

Then there’s research and development tax relief. If you are lucky enough to have successfully received a grant, you may be somewhat surprised to hear that you could also benefit from tax relief for spending the money that you have received from the grant. You can claim under the RDEC scheme, whether you are a large company or an SME for the grant-funded projects, which for money spent since 1 April 2020 will generate either a tax rebate of up to 10.53% of the eligible costs or in the event you are loss-making a cash injection of the same 10.53%, so in a way you are having your cake and eating it.

If you are a small company and you either didn’t apply for a grant or weren’t successful in your application, but have decided to go it alone regardless then you could in fact be in line for an even greater cash injection for a loss making company of up to 33.35% of your eligible spend, if you are profitable it will reduce your tax liability by up to 24.7% of the eligible spend.

The last way the government can help is through Patent Box. If your new product is so ground breaking that you are looking to Patent it and are successful in being granted a patent, you could reduce your tax bill further, as a result of the profits being generated on the sale of the items being taxed at a reduced rate of 10%.

How Cooden can help

As we move forward in 2021, our goal is to be able to help you with all of these aspects of funding for innovation, as we look to grow our business by incorporating a business grants element to our existing family of services, which already focus on R&D and Patent Box.

In the meantime, one of the things that we have been doing is offering a reduction in our fees for companies that are developing green technology, sustainable agriculture and renewables. We’ve worked with a few companies this year and are looking to find and support more businesses that are working in these high value areas that will help all of us to be a little more sustainable in our lives. If you would like to have a chat to determine whether you have an eligible project, sustainable or not then you can book a 15 minute call with our director, Simon Bulteel.

Ultimately it feels like a lot of us accidentally became more sustainable as a result of Covid, but in spite of this, it will be great to put 2020 behind us and make the most of our new discoveries and get back to making good on our original sustainability goals as we grow into 2021.

The post Did sustainability take a back seat to survival in 2020? appeared first on Cooden Tax Consulting.

A product launch is always a fantastic opportunity for a company to celebrate their success. However, this year it’s a bit different, you won’t be doing a hard launch on a stage at a fantastic business exhibition with 100s of your potential customers in front of you. You are going to have consider a soft launch using online and hope that the phone rings.

But this year you’ve read this article, and instead of following in the footsteps of a significant number of your peers and competitors, or indeed your own business last year, you’ve realised that your product launch also represents the point at which a significant failure arises often without anyone really noticing, or even worse caring.

This year you’re going to do something different, you’re going to pick up the phone and have a conversation about Research and Development Tax Credits with an expert.

You could be missing out on R&D Tax Credits

It’s one of those, “unknown, unknown” moments that exist everywhere in business, but after being around for 20 years Research and Development Tax Credits should no longer be one of them, but it is, despite a plethora of “experts” popping up all over the space, shouting about it to accountants and to businesses alike.

Alas, thousands of businesses continue to miss their right to claim this most generous of tax reliefs.

We are but one of those experts, but we do have some substance behind our claims, we’ve been operating for 7 years now (our birthday was 1^st September) and have supported nearly 200 companies to claim more than £16m in R&D Tax Credits claims.

But back to your new product, it’s taken you a while to get from concept to launch, along the way you’ve had Eureka moments and more abject failures than perhaps you would care to mention in polite company.

You and you’re team have no doubt had several more ideas during the same time period and may be one or two of them are still going through the product development process (despite everything Covid threw at you in 2020) and your hoping to launch it in 2021 to a live audience.

Well, the good news is those failures are great news for your cashflow, they clearly weren’t at the time, but they are now. “Why” do I hear you ask? Well, normally your failure would go hand in hand with a scientific or technological challenge that you were trying to overcome. After all, we don’t set out to fail, it just seems to happen naturally! Something that you thought would be straightforward, turned out to be a massive obstacle in your path to success.

Failure presents an R&D Tax Credit opportunity

We celebrate your failure as much, perhaps more than we celebrate your success. It sounds strange and we are in no way some sort of strange voyeur watching your business with a voodoo doll and giving it a prick every now and again just to see what happens.

We celebrate your failure because we know that the failure while difficult in the short term, will open up the opportunity for you to claim Research and Development Tax Credits, whether you are paying tax or not they can boost your cashflow.

The over-riding fundamentals for a claim for R&D Tax Relief are:

• There has to be a project (developing a new/improved product)
• There has to be an advance in science or technology (you probably aren’t going to launch a new product that is worse than what you already have, or than the market already has)
• The advance has to be achieved by overcoming some form of scientific or technological challenge (the only way to overcome these is by learning and adapting through failure)
• The solution to the challenge cannot be readily deducible by a competent professional operating in the field.

If you look back through your new product development, you’ll no doubt see it littered with failures and the one or two products that do make it to the point of launch didn’t get there by some fluke, they got there through overcoming every single technical or scientific challenge you were presented with.

Now you just have one final hurdle to get over, and that hurdle is of your own making, you just have to talk to an expert to confirm that you can claim.

Find out if you are eligible – fast

Book a Find Out in Fifteen Minutes discovery section with our Director, Simon Bulteel, and start your next journey, we promise it will be worth it, just to know, for sure! Get in touch with us, speak to you soon.

The post Launching a new product and claiming R&D Tax Credits appeared first on Cooden Tax Consulting.

Hopefully, your business isn’t ready to be pushing up these daffodils (I know it’s daisies but give me some artistic licence here!) just yet, but not every business’ garden is blooming right now, and there’s probably still a squeeze to come as we get ready to start paying down our BBLS and CBILS.

Whilst the onset of spring has brought with it the triumphant sound of the vaccines charging down the hill into battle and the prospect of the chinking of glasses with loved ones, giving our private lives a boost, for most of us, our businesses still need a bit of positive news.

Rishi’s Budget may have already been announced by the time you read this but hopefully the talk of rises in corporation tax will be put on hold for now, whilst we are all still recovering!

There are however things that you can be doing to boost your cash, because cash will definitely be king for the few months and years, you could be topping up your BBLS to its maximum amount, if you’re at the maximum you could be investigating whether you could transfer it into a CBILS (I am certainly considering that), there are a myriad of other opportunities and if you aren’t in touch with your local Growth Hub, I suggest you reach out to them, they are one of the best kept secrets in business support.

There is one more thing you could also be doing which is another of those best kept secrets, if you’ve been developing a new product, process, material, device or developing a piece of software or you have been significantly improving an existing item, you could be eligible to claim for Research and Development Tax Credits. What is more, because you can claim retrospectively for the previous two years and it is currently taking HMRC 4 to 6 weeks to process and payout claims, you could have more cash in your bank come the summer.

Some of the businesses that often overlook their potential are: Engineers, Manufacturers, Food & Beverage companies, Processors, Packagers, even Software Developers overlook their potential. Even if your business isn’t included in this list, it won’t stop you from claiming if you have an eligible project. You just need to be a limited company and a going concern at the time of your claim being processed. We’ve even done a claim for Debt Collection business!

If you want to find out more, visit our website, phone Simon on 01424 225345 or book a “Find Out in Fifteen” discovery call, it really could be worth it!

The post Spring is freeing the best kept secrets! appeared first on Cooden Tax Consulting.