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R&D Tax Credits

Research and Development Tax Credit

Receive cash back for your company

A huge proportion of companies that could make successful R&D Relief claims are failing to do so because they are either unaware of this fantastic opportunity or have been wrongly advised that they do not qualify.

Your company will be eligible for a R&D Claim if it’s taking a risk by improving or developing a process, product or service.

Whether you have developed new software, improved a system’s efficiency or designed a product, this specialised, complex area of tax law can be “the gamechanger” that allows your company to fund future growth.

A typical HMRC R&D Tax Credits claim for a small company is £70,000, whilst claims for larger companies can be in the millions.

What is a research and development (R&D) tax credit?

R&D is a corporation tax relief that may reduce your company’s tax bill, or even provide a cash rebate to enhance further development. This tax relief can only be claimed if your company is liable for UK Corporation Tax.

The way you claim tax relief depends on the size of your company. There’s the Small or Medium-sized Enterprise scheme and the (less generous) Large Company scheme.

Your company can only claim for R&D tax relief if an R&D project seeks to achieve “an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological

uncertainty”, and not simply an advance in its own state of knowledge or capability.

As you might expect, this explanation can raise more questions than it answers, which is why many companies choose to employ the services of an expert, experienced in making many similar claims, to assist them.

The project must relate to your company’s trade. This can be either an existing one, or one that you intend to start up based on the results of the R&D you have undertaken.

If your company is claiming tax relief under the small company scheme it must own any intellectual property that might arise from the project in order to claim HMRC R&D Tax Credits.

technology

How to make a successful claim

If your company is (or has) faced:

1

Uncertainty due to the complexity of the product, software or system being designed and built.

2

Assembled a number of components (or software sub-programs) in a novel way or non-standard pattern.

3

Worked on combining standard technologies, devices and/or processes in a novel way, even if the principles for their integration are well known.

Then there is likely to be (what HMRC term) “scientific or technological uncertainty” and the company is most likely eligible to claim R&D Tax Relief.

Based on our experience, many entrepreneurs start scratching their heads when considering whether their work falls within this definition, so that’s why we always ask companies to ask us for our opinion as we have experience of making similar claims.

What our Clients say

Michal Szlas, CEO

Michal Szlas, CEO

“Metric have worked with me to help me grow the company to where we are now. They are professional and available to help whenever required. They are also very knowledgeable about the market and have helped me with raising money as well as other corporate matters. As a result, they helped take the Company from turning over £25k a month, to almost a million per month. Helping me raise money which has definitely aided the business growth and which has been greatly appreciated”

otty logo
Read how we helped a fast growing e-commerce business expand operations (click to open)

The founder of Otty, Michal Szlas, met Metric when the Group was funding its operations organically. Michal knew however that in order to avoid losing market share to its competitors it needed to undertake a funding round to have the ability to finance further growth.

With help from Metric, Michal considered the various funding options available before pressing ahead with a small “seed” round of investment and then, in due course, a larger “Series A” raise.

This has allowed Michal to expand operations, entering the B2B market and overseas markets.

Michal recognises the importance of having a professional advisor that understand high-growth companies:

“Metric have worked with me to help me grow the company to where we are now. They are professional and available to help whenever required. They are also very knowledgeable about the market and have helped me with raising money as well as other corporate matters. As a result, they helped take the Company from turning over £25k a month, to almost a million per month. Helping me raise money which has definitely aided the business growth and which has been greatly appreciated.”

Looking ahead, the Group is entering a new phase of growth, to reflect the demands of a larger management team and shareholder base. This places greater importance on the need for accurate gross profit margin analysis and forecasting, which Metric are helping to develop.

We asked Michal what his advice for other companies would be that are growing rapidly, with all the benefits and potential pitfalls that this brings. Michal said:

“Build strong relationships with the people and companies you think are going to see you through the growth and take your time to perfect the product.”

Wise words indeed.

Why 94% of eligible companies are not claiming their full entitlement

Research has shown that the majority of companies are failing to claim their full R&D Tax Credit entitlement. The main reasons for this are:

The Directors thought a R&D Tax Credit claim was not applicable to their company.

Their Accountants said the company couldn’t make a successful R&D claim.

A belief that R&D tax law is too complex and time-consuming.

Not realising that the company could claim for the past 2 years.

The Directors were not aware that they could apply year after year.

The Tax Claim failed to take advantage of the generous changes made to the Scheme over time.

The Directors weren’t aware the R&D tax claim could be combined with a Patent Box claim or a Video Games Tax Relief claim.

What could your company receive as a cash payout?

Where a company makes a net loss for corporation tax purposes, the amount of the loss can be cashed in (or “surrendered”) to HMRC in return for a cash credit, which can be worth as much as 33.4p for each £1 of R&D expenditure.

This is the best option for cash-strapped companies and start-ups.

Alternatively, carry this loss forward to offset against future profits and the tax saving could be worth 46p for each £1 of R&D expenditure.

Metric meeting

What makes us different

With Metric you’ll be best placed to make a successful R&D claim because we have a well-established track record of helping Innovative companies, so you’ll receive expertise and advice that’s 100% relevant to your business.

We’ll talk to you to understand your business and the potential for making a successful claim.  We will discuss how we would work with you, what will be involved and our fees for making a successful claim.

If you decide to proceed, one of our qualified Accounting Directors will review your business and relevant financial records in detail to identify R&D Tax Credit opportunities.

We’ll then produce an HMRC-compliant technical analysis, complete the necessary tax schedules and deal with any HMRC queries.  If a tax rebate is due, you should receive this from HMRC approximately 60 days after the claim has been submitted.

Our knowledge and experience means we are uniquely placed to identify and maximise your company’s full entitlement under the R&D Tax Credit scheme.

We’ll also share our experience with you to help you establish systems to capture all costs associated with future R&D qualifying projects. This advice is provided free of charge and can be used in your company today to maximize further claims in the coming years.

If you want to find out more why not give us a call and book your free, no-obligation consultation today?

We are Tech specialists

we only work with ambitious, technology companies and scalable businesses growing at least 25% per annum (either in terms of revenue or employees). This means that we are perfectly placed to help with your R&D Tax Credit application process, and beyond.

We are chartered accountants

What’s more, as we are a chartered accountancy firm, registered with the Institute of Chartered Accountants in England and Wales, you can have faith that we not only have knowledge and experience of your ever-changing business sector but financial acumen as well.

We charge fixed fees

We also operate on a fair, transparent, fixed fee basis, which avoids problems later on.

What does it cost and what’s involved?

We provide a complete R&D Tax Credits service, which includes completion of all of the steps set out below, for either a fixed fee or, if you prefer, a percentage of the tax rebate which is only payable in the event that a successful claim is made.

With Metric you’ll be best placed to make a successful R&D claim because we have a well-established track record of helping Innovative companies, so you’ll receive expertise and advice that’s 100% relevant to your business.

1

We prepare the R&D Technical Document, which we submit as well as the corporation tax computation to HMRC.

2

We’ll also prepare the calculations to maximise any claim as well as liaise with management and HMRC to ensure all queries are dealt with and resolved.

3

We’ll also prepare the calculations to maximise any claim as well as liaise with management and HMRC to ensure all queries are dealt with and resolved.

4

We’ll also prepare the calculations to maximise any claim as well as liaise with management and HMRC to ensure all queries are dealt with and resolved.

5

We’ll also prepare the calculations to maximise any claim as well as liaise with management and HMRC to ensure all queries are dealt with and resolved.

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What makes us different

We share your ethos

For many, the tech startup scene is about lifestyle choice and purpose. We feel the same way.

Involved in the disruptive community

We actively seek to interact and learn from the disruptive community in order to improve the ways in which we help.

Value for money

We strive to provide quality advice which is good value for money and on fair payment terms.

Our strong professional network

Because we are specialists, we have developed strong relationships with a range of key players in our sector.

Ready to get in touch?

Katrine and James, Metric

Unlike many accountancy firms, we have the specialist knowledge and experience to provide the tailored advice that your company needs.

We’re confident that our experience of helping Award Winning companies will ensure that you eliminate much of the pain – and costs – associated with operating your technology or high growth company.

In order to find out more and to book your free 45 minute consultation, contact us on 0203 542 4990 or get in touch via our contact us page.