Using a specialist to reap the benefits of an innovative landscape
Theresa May recently made an important speech, devoted entirely to science and The Industrial Strategy. In the speech, Mrs May signposted that her government remains firmly committed to the ongoing promotion of innovation as a way of positively influencing the nation’s productivity levels and general economic health as global competition intensifies.
Theresa May Ex Prime Minister
Great changes in how we live, how we work, how businesses trade will reshape our economy and transform our society in the years ahead. This technological revolution presents huge opportunities for countries with the means to seize them. Britain is in pole position to do just that. We are ranked first in the world for research into the defining technologies of the next decade, from genomics and synthetic biology, to robotics and satellites.
The continued belief for the need to support innovating companies across the UK is good news for the many businesses which can benefit from the financial rewards available through funding schemes such as R&D tax credits and Patent Box. R&D tax credits are a way of delivering valuable cash injections into a business, which can deliver up to 33p for each £1 a business invests in innovation. The type of activity which qualifies for this funding is defined in HMRC’s criteria for the scheme, and can be found within a variety of company operations, from app development, to lighting design, to improvement of warehouse management systems. Government funding has allowed MPA clients to break into new markets, take the MedTech industry by storm and maintain their position as market leader. This tax relief is available against costs for staff, consumables, software, subcontractors and utilities integral to an R&D project.
Likewise, Patent Box, first introduced in the UK in 2013, is another government tax incentive designed to encourage companies to benefit from their patents by reducing the UK tax paid on the profits. Essentially, it promotes research and development activities by taxing patent revenues differently from other commercial revenues. The great thing for businesses that qualify is that both schemes can work in conjunction with each other – allowing claims to be made for both schemes in connection with the same identified project. This can add up to a significant cash windfall for companies who are able to use the funds to reinvest into other areas of innovation, recruit more staff and fuel further growth.
The perfect partner
The key to success in what can be a complex area of tax legislation is to partner with specialists that understand how to identify, compile and present a compelling case that ticks all the HMRC boxes. This should cover eligibility – whether this is the R&D tax credit scheme or use of the Patent Box incentive. At MPA our specialist understanding of the changing landscape in relation to HMRC, and the ways in which a business can claim, means we’re able to leverage maximum claim value for our clients.
MPA provides the technical experts who hold in-depth knowledge of the sector the company making the claim works in, for example, engineering, manufacturing or computing. Such sound technical understanding translates into a solid foundation from which to unearth the kind of evidence HMRC is looking for within a claim, as well as providing the practical capacity to deal with the wide range of HMRC enquires that can result following a claim, and which could hold up payments and result in fines.
Not only do our industry specialists protect clients from risk and maximise claim entitlement, but they also have the skills and experience to unearth and understand the nuances of a company’s R&D activity. In addition, they have proven success in working with companies, which have also seen claims previously rejected. In fact, 9 out of the 10 claims reviewed by MPA for new clients are incorrect with businesses either claiming too much, too little or for the wrong activity, which could result in a HMRC enquiry.
A case in point
A good example is MPAs work with Mapmyhealth, a pioneering Oxfordshire-based SME, which developed a NHS backed app to help 70,000 sufferers of type 2 diabetes lead better lives. MPAs experts built an extremely strong case that clearly articulated the areas where the company had demonstrated eligible research and development activities. As a result, Mapmyhealth received a substantial windfall from its claim.
Why it pays to work with a specialist
The only guaranteed route to financial success of this type is to engage tried and trusted specialist skills and knowledge that makes the process as seamless as possible. Much in the same way that you would only trust the work of an experienced mechanic when your car has an issue, the success rates of claims in a complicated area of tax law are only enhanced when using people who spend every day working within the world of R&D tax credits and Patent Box. For some organisations, a combination of the expertise on offer from a specialist such as MPA, working alongside the broader financial remit of an accountancy practice, could offer the very best of both worlds. It allows specialists to focus on specific areas without potential conflict, and provide the kind of all-around, expert-based, financial advice and support that benefits the type of innovating companies the government is so keen to support.