Autumn budget for 2018

With Brexit around the corner there had been high expectations from UK business for the government to explore new ways for our country to look attractive and appealing post EU. Unfortunately, this did not quite happen. However, in-light of a recent significant fraud case identified by the HMRC, the government has re-introduced a NIC and PAYE cap for SMEs claiming a payable credit.

A new PAYE and NIC cap for the SME payable credit

Originally withdrawn in 2012, the government has now declared to re-establish the PAYE and NIC cap on SME payable credit, to advert abuse of the SME payable R&D tax credit. The duration of accounting commencing on or after 1 April 2020, will stand at 300% of the company’s total PAYE and NIC for that period. With this PAYE and NIC cap being reintroduced, this incentive will possibly be more likely to achieve its goals: If SMEs invest in appointing their own employees and produce STEM jobs. The benefit they receive will not be affected by the cap. Hopefully, this will stop the amount of exploitation and motivate the correct practice between businesses.

Research and development in business

Research and Development (R&D) Tax Credits are a tax incentive designed to encourage UK companies to invest in innovation. For small and medium enterprises (SMEs), R&D is a Corporation Tax (CT) tax relief that can reduce a company’s tax bill if liable for CT or can result in a payable tax credit.

For large companies, the name of the incentive is Research and Development Expenditure Credit (RDEC), which is an above the line credit and can allow them to claim payable cash credits or reduce their tax bill.

Research and Development for Tax Purposes

The definition of R&D for tax purposes is much more extensive than you might consider. The R&D tax relief schemes are designed to be suitable across any sector and exceptionally inclusive.  It’s highly feasible that any challenges you face within your business projects could qualify as an eligible expenditure.

Government’s terms on R&D

As stated by the government on their R&D relief support companies that work on innovative projects in science and technology. It can be claimed by a range of companies that seek to research or develop an advance in their field. It can even be claimed on unsuccessful projects. They also state that businesses may be able to claim Corporation Tax relief if your project meets their definition of R&D.

Requirements for R&D Tax Credit

The work that qualifies for R&D tax credit relief is required to be part of an existing project or a specified project you intend to pursue in order to make progress in science or technology. This does not include an advance within social science such as economics and pure maths.

To get the R&D relief you need to justify how a project:

  • looked for an advance in science and technology
  • Attempted to overcome uncertainty
  • had to overcome the risks within the project
  • couldn’t be easily worked out by a professional in the field

Your project may research or develop a new product, service, process or to improve on an existing one.

Innovation success story

Information sourced from Oxford University, an innovative company called Brainomix have developed software which helps doctors to evaluate the severity of strokes and quickly identify appropriate treatments. With the support and funding from the Innovative UK, the software analyses brain CT scans of stroke patients to determine whether they are likely to benefit from either clot-busting (thrombolytic) treatment or mechanical clot removal. This advanced technology allows hospitals to evaluate within minutes lifesaving treatment for their stroke patients.

Dr. Michalis Papadakis, CEO, and co-founder of Brainomix, explains: “In the hours after a stroke, it’s really difficult to tell how much damage has occurred on the brain CT scan.  The signs are very subtle but are an important factor when selecting patients for life-saving treatment”

Clinical trials have shown that e-ASPECTS software is at least as good as expert physicians at evaluating CT scans of stroke patients. Thus, saving the life and quality of lives of stroke patients, time and money.

Is your business eligible for R&D Tax relief?

The guidelines and regulations controlling this niche area of tax credits are complex. So, before we get too involved in claim preparation it’s important to take a bit of time to understand the business, both technically and financially.

The Industrial Strategy Progress

The Industrial Strategy white paper was published back in the last quarter of 2017. In this article we revisit the strategy and take a look at what’s been achieved since it was released. Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy stated that there had been 4 grand challenges identified by the state. They are;

  • AI and Big data
  • Clean Growth
  • Future of Mobility
  • Meeting the Needs of an Ageing Society

The strategy draws on the experience both of foreign governments and previous UK governments in their efforts to position their countries as leading innovation experts and increase GDP, jobs and living standards. In terms of incentive to meet these challenges the white paper states that an additional £7bn of public funding, over 5 years,  will be invested largely through R&D funding/ tax credits.  .

What has been done so far in regard to the industrial strategy?

The future of mobility has been set in motion by a company based in Finland.  ‘Whim’ is being called the modern alternative for the daily commuter and the alternative for owning a car.  Although the company isn’t English, their projects are sweeping the UK and the Far East.

They say, “Here at Whim we believe there’s the right vehicle for each and every journey. Sometimes it’s a car but often it’s a train, a bus, a tram, a bike or a taxi. That’s why we’ve created a smarter way to get around and a more affordable option to car ownership.”

The company have been awarded The European Start-up Prize for Mobility and once rolled out successfully in Birmingham Whim will be rolled out to the rest of the UK .


AI and big data?

First let’s start by defining what this actually means. According to the Study of Artificial Intelligence and Simulation of Behaviour, AI is about “giving computers behaviours which would be thought intelligent in human beings”. And the way to train these computers is, of course, big data which means that the two go hand in hand. The way they are able to become intelligent is by reading algorithms that have been learned through inputted data in computers.

How is AI going to help the country?

AI will help the country in various different ways. It’s already been suggested by Babylon Health, that their AI app can diagnose health conditions better than their human counter parts. In the UK students need to pass tough exams to qualify as a doctor This test isn’t public so the developers at Babylon managed to get their hands on past questions. In order to pass this test doctors have to get a 72% pass rate. Babylon claim that their chatbot got 82% on this test. However, physicians are not convinced of its accuracy. Although this data could help a lot of people get diagnosed more quickly for acute medical problems and in a few years, who knows, this could be a first stage process before you go and see a GP Ultimately potentially leading to shorter waiting times on the NHS and saving money by making more services efficient and streamlined.

How has clean growth came along since the industrial strategy was introduced?

Clean growth was another grand challenge that the industrial strategy wanted to focus on. Although the government is striving for the country to grow, they want this to be done as ‘cleanly’ as possible.

This cleanliness relates directly to the environment and the 2015 United Nations Climate Change Conference held in Paris. This is to be done by lowering fuel emissions and the reducing the use of fossil fuels which has been done by Jaguar and Tesla currently in the race to see who can build the most efficient and desirable car. By 2040 hopes are that diesel and petrol-based cars won’t be made anymore and this is reflected in the governments intention to ban internal combustion engine vehicles beyond this date.

As well as the mobility cleanliness, household emissions are targetted to meet the minimum energy performance standard by 2035 and no food waste will be permitted go to landfill by 2030. In addition to all of this there are further plans to continue pressing for more wind turbines and bio-degradable fuels.

Meeting the needs of an ageing society

As living standards are improving, the population is ageing which means there is more demand for services from older generations. Theresa May says that she wants to meet the demands of an ageing population and give them as much independence as possible. More than 10 million people over the age of 65 are living in the UK at the moment – a figure that is set to double by 2050.

Innovation, research and development will all be needed to cater for the ageing society and help them to remain active and independent for as long as possible. Ageing is a triumph of development in itself. However, what comes along with this is that working lives are extended. People will have to make better choices surrounding their careers and provision for their retirement. As the living age rises, so does the pension age. Can a labourer be a labourer until they’re 75? Will allowances be made for those with strenuous jobs and if so how are the government planning to do this?

Are you contributing to one of the grand challenges?

9 months on and everybody is clear on the guidelines. There is a reward for contributing to these 4 grand challenges, and only the future can tell whether the guidelines and timescales for these markers to be hit will be met. If you are innovating or contributing to any of the 4 grand challenges and are a company that has UK offices, are UK registered and paying corporation tax make sure you get in touch and see how much you could claim back.



R&D in India turns plastic waste into innovative infrastructure – a plastic road.

Here in the UK we are constantly subject to the power of the seasons. This winter has been the coldest on record with snow and rain and regular red warnings being issued by the Met Office. Unfortunately, this weather brings with it damage to the roads. Monster pot holes are now forming the in hope of shattering suspension and splitting alloys across the country and as a result creating more and more jobs for aspiring mechanics. Good news for mechanics! Bad news for motorists.

India used to face similar problems to us. However, in a certain legendary town, Chennai, there is a street called Jambulingam Street, whose main road has taken a turn for the better and hasn’t suffered with potholes for years. The tar road in the hustling Nungambakkam area has survived through major flooding, several monsoons, reoccurring heat waves and a steady stream of cars, trucks and auto rickshaws without showing the usual signs of wear and tear.

This road was developed in 2002 and hasn’t exhibited the holes, cracks and usual wear and tear we usually suffer from back in Blighty! The reason behind this is that Jambulingam Street was one of India’s first plastic roads which was developed to help combat the growing plastic waste problem.

An early performance report by India’s Central Pollution Control Board stated, “The plastic tar roads have not developed any potholes, rutting, raveling or edge flaw, even though these roads are more than four years of age”. This gained support from scientists and major politicians and led to another 21,000 miles of plastic road in India today. Their top benefits are noise reduction, which may help with test tracks that are located by housing estates and regulated by the council, along with prevention of cracking after a harsh winter like the one we have just suffered in the UK.

Cost vs ROI

Although the cost is perhaps the only negative point, using the plastic–mix tar can increase the price of a road by 30-50%. However, the return on investment and benefits to the environment make the venture worthwhile. So much so that even India’s Prime Minister has given the project his blessing calling it Narendra , who has made “Swachh Bharat” (which translates to “Clean India”) a kind of personal crusade. As well as making it mandatory for road construction in urban areas where over 500,000 people live.

Are you solving a problem that requires research and development? Or did you have an idea, started developing and the project failed? If your business has invested, money, time or labour in any research or development activities make sure you get in touch today to see what you could claim back. Can you afford not to?


Plastic Road India 

India Times



5 Women in STEM You Should Know This International Women’s Day

You may be wondering what’s the big deal about International Women’s Day, so let’s start with the facts. Women in Geoscience are half as likely to receive excellent recommendation letters than their male colleagues. Science articles disproportionately chose men to review their articles over women. In 2013, Nature pointed out that only a fifth of full professorships are held by women.

To put it plainly, there are a lack of role models in the Science, Technology, Engineering and Maths sectors which equates to women in STEM not having the support and guidance to look up to someone similar to them. This then trickles down and converts into a lack of females taking these career paths which is why women in STEM should be celebrated and distinguished in the public domain.

Caroline Herschel 1750 – 1848

Caroline Herschel is probably one of the main reasons millennials are so obsessed with astrology today. She was a German astrologer whose contributions to astronomy were discovering several comets. Her brother William became the king’s astrologer and gave Caroline her own telescope, which helped her to make these discoveries. She helped him develop the modern mathematical approach to the science.

Mary Anning 1799 – 1847

Mary Anning was best known for her discoveries along the English Channel at Lyme Regis. Here she made important findings along the Jurassic marine fossil beds and collected and traded fossils. The Natural History Museum has crowned Anning ‘the greatest fossil hunter’, due to the extraordinary findings she made throughout her lifetime.

Maria Mitchell 1818 – 1889

Maria Mitchell was also an astronomer. However, she later went on to open her own school for girls and taught them science and maths. She was also the first female astronomy professor in the USA which was revolutionary for her time.

Mae Jemison 1956 – Present

Mae Jemison was the first black woman to travel in space. On September 12, 1992, she flew into space on the Shuttle Endeavour for mission STS-47. She conducted lots of research throughout her career and was responsible for studies in motion sickness, weightlessness and bone cell formation.  She is still alive today and has created the Jemison Group that is an innovation center that uses research and development for daily life.

Temple Grandin 1947- Present

Temple Grandin is a professor, best-selling author, inventor and an activist and spokesperson for autism. She is particularly renowned for her work within the humane treatment of animals when they are led to slaughter. She has spent her life developing stress-free facility designs and standards of humane management. She realised that cattle couldn’t go down steps so instead they went down a cleated ramp to the abattoir and found that when cattle get nervous they walk in circles so designed pens to be circular.

Other learning resources:





Women in STEM | Ada Lovelace

Innovation is a word that gets thrown around the media a lot lately. Did you know that Britain is actually a country of innovators? With International Women’s Day just around the corner we thought we’d take a look into the past and remember one of our favorite females in STEM.

Ada Lovelace was an 1840’s woman. She was a revolutionary from a good family who was lucky to be taken as seriously as she was in her time. She used this platform to inspire women and young girls across the globe into going into science, technology, engineering and mathematical jobs. She was the first STEM pioneer.

Enchantress of numbers

She was a brilliant mathematician which in her lifetime would have been out of the ordinary but she was allowed privileges that would have been declined to most women living in the same era.

Lovelace is widely recognised for being the world’s first computer programmer. She wrote the world’s first machine algorithm for an early computer that existed only on paper in theory. This computer was dreamt up by  Charles Babbage and called the ‘difference engine’ and it was designed to produce mathematical tables automatically and error-free. Babbage could not create the algorithm, but Lovelace could and so the two worked well together as a strategic partnership.

Lovelace was well ahead of her time. She predicted that machines would be able to manipulate anything – not just numbers.

Due to financial hardship and personal set backs the difference engine wasn’t built during Babbage or Lovelace’s life time. However when the machine was finally built from the original plans in 2000 it worked.

If research and development tax credits were around then, just think what Lovelace could have achieved, she continues to inspire girls and women all around the globe to pursue careers in STEM.

If you have a great idea that might solve a problem for a community/ person and includes expenditure on research and development get in touch and see how we can support you.

Thermal transfer ‘Melt Mat’ could be the answer to problems caused by snow

Snow is one of the most reflective substances that mother nature gifts us with which means that when it falls it is extremely hard to clear- even when the temperature is above freezing. We see it all over Twitter and news channels The Met Office published Amber warnings and, this March, even Red warnings for those affected by the hazardous conditions left by the weather.

Work places close, meetings get postponed and our way of 21st century living becomes extremely difficult to carry on with heaps of the white stuff left on the roads and pavements. However, now it seems there is an answer to our snow – related problems.


A group of engineering students from Virginia Tech have found a solution called ‘The melt mat’. In simple terms the melt mat accelerates the process of melting the snow when placed on top of snow banks. It’s made up of a thin sheet of aluminium sprayed with a flat black spray paint. Black and aluminium being conductors and absorbing of the sun.

Jonathan Boreyko, an assistant professor of biomedical engineering and mechanics and the team’s faculty advisor said,“Generally, snow reflects about three-quarters of the sun’s radiation back into the air, so it’s actually really hard for the sun to melt a snowbank,”.

(Credit Virginia Tech)

The prototype ‘melt mat’ has been tested in a controlled experimental condition and melting times have been accelerated by 300%! Let’s hope that when the product is developed and available it will be just as effective on users drives and walk ways.

By investing in research and development the team were able to solve a problem that many of us face on a day to day basis. If you have a problem in mind that you think you can solve, make sure you get in touch to claim back on your research and development efforts. The incentives are all there and support can be claimed.

The Industrial Strategy ‘Investing in R&D to transform the UK economy’

As the Brexit date is fast approaching with no news on a post- Brexit deal yet, one thing that is certain is that once we have parted ways with the European Union the government will have research and development tax relief at the core of their new industrial strategy, released late last year.

In order to raise the standard of living in England, “our businesses need to revolutionise productivity in all sectors from construction and agriculture to manufacturing not forgetting the creative industries”- read the strategy.

Research and development has been offered as one of the main solutions to the problems released in 2017’s Autumn budget and the government have vowed that they will be ‘investing in R&D to transform our economy’. Considering that the proportion of the wealth that the UK spends on R&D has been stagnant for 15 years this is encouraging for businesses that perhaps wouldn’t have usually ventured out into spending on research and development finally getting the incentives and re-assurance that they need.

In the Industrial Strategy the government commit to reach 2.4 per cent of GDP investment in R&D by 2027 and to reach 3 per cent of GDP in the longer term, placing the UK in the top quartile of OECD countries. As a first step the government has already increased the rate of relief for large companies from 11% to 12%. It will also invest an additional £2.3bn over what was previously planned in 2021/22, raising total public investment in R&D to approximately £12.5bn in that year alone. Meaning that institutes who already practice research and development and innovation clusters of some of the worlds most talented engineers will have more scope to solve problems the everyday person suffers with, or maybe make the next breakthrough discovery in medicine.

Break the stigma surrounding R&D tax relief

The strategy doesn’t just focus on large corporations either, it details how smaller companies and SMEs have not been forgotten, stating that in this segment of businesses there is a need for a different approach when creating exposure around the scheme. SME’s beliefs around research and development tax credits need to be altered. There is a stigma that comes along with making an R&D tax claim which is putting off smaller businesses with getting involved. There are over 5.5 million small businesses across the country which give the UK, ‘extraordinary vibrancy and resilience’, in the chancellor’s own words, and it would be a shame for the UK to miss out on their engineering abilities and problem-solving skills because of lack of funding.

If you know a business or business owner who is carrying out research and development but is wary about the complexity of the R&D Tax Claim show them this article or get in touch here. There is lots of funding to be claimed back out there and the engineering possibilities are extraordinary when we all work together.

Improve Cash Flow and Growth

Using R&D Claims to Improve Cash Flow and Growth 

If you’ve done your homework on the UK Government R&D Tax Relief Incentive Scheme, then you’ll know that the reason for the scheme is to encourage companies to invest in research and development activities.

This incentive isn’t just to benefit companies that conduct R&D in their usual business activities (think lab technicians and precision manufacturing), but it can also provide incentives for businesses that have undertaken R&D activities without even realising at the time (think construction companies, web developers and even new starts).

This means that there are many businesses, in many sectors, that can benefit from the R&D Tax Relief Scheme.

The problem, however, is that there are certain stigmas around making R&D claims. That the scheme itself is too complex; there isn’t the time to put a claim together; you have to outlay resources to submit an accurate claim; if the claim isn’t approved it will be a waste of time and money.

Well we’re here to tell you that’s true… unless you use the right R&D tax scheme specialist, in which case, there won’t be any risks. All your concerns over making an accurate R&D claim will be alleviated, including worries that making a claim could impact negatively on your cash flow.

So, is using a R&D tax relief specialist really worth it?

Is It Worth Using R&D Specialists for R&D Tax Claims? 

Understanding the R&D Tax Credit scheme isn’t easy, we’ll give you that. There are many interpretations of what constitutes a scientific or technological advance, not all of them correct.

Using a specialist in R&D who makes it their entire business to understand and utilise the R&D tax scheme incentive comes with more benefits than just saving you time and confusion. It also:

  • Improves cash flow

With the right R&D tax relief specialist you won’t have to pay a fee until after the benefit has been received. Therefore, businesses won’t have to part with any money for using a R&D tax specialist until they’ve actually received their tax incentive credit payment or reduction. And if you don’t receive a benefit, then you won’t have to pay a fee.

This means that the process of making R&D claims won’t have a negative impact on your cash flow. Here at R&D Tax North West Ltd, we won’t charge a fee until you receive some benefits, to ensure you can maximise your cash flow to benefit your overall business.


  • Increases the chances of a final approval


Unlike Accountants, who have a general knowledge of many tax schemes and legalities, R&D Tax Relief Scheme Specialists have an extensive and in-depth understanding of the R&D tax credit scheme, including any changes that can occur. This means that R&D tax relief specialists are better qualified to prepare and submit accurate claims that meet the complex requirements of the scheme.

In addition to this, R&D tax relief specialists like R&D Tax North West Ltd, hold years of experience with successful claims, as well as extensive technical knowledge that relate to a range of sectors, including manufacturing, renewables and energy. So, R&D Tax North West not only understand the technical jargon, methodology and rationale of your R&D projects, but also how to simplify this for the R&D Tax Claim submission.

  • Identifies every qualifying expense for maximum benefits

Not all costs incurred through R&D work qualify for R&D tax relief. In fact, there are many factors that need to be considered to determine exactly which costs qualify; for example, hire or rental costs don’t qualify, neither does expenditure on the production and distribution of goods.

A person inexperienced in preparing R&D claims may overlook a variety of costs that can be claimed. However, R&D Tax Relief Specialist can identify the optimum value of eligible costs so that you receive the maximum relief available; this includes helping you claim correct percentages for sub-contracted work and expenses for collaborative R&D projects.

  • Inspires further innovation for growth 

Despite the fact that R&D work is critical for the success of many businesses, it is often avoided due to the risks and costs involved.

Venturing into the unknown with R&D work can be daunting. However, it can be more appealing when there is the support of a financial incentive, the R&D Tax Relief Scheme, to alleviate the financial burden of conducting R&D. It’s reassuring to know that even if R&D projects are not ultimately successful, eligible costs can still be claimed.

The R&D Tax Credit Scheme is, of course, a great support to inspire businesses to conduct R&D. Not just when it comes to product innovation, but R&D that is conducted to devise new strategies, approaches, capabilities and processes that ultimately help to lower running costs and increase the financial stability of the business.

So is it worth using R&D tax specialists for R&D tax claims? Absolutely.

Not just to help improve cash flow with a no benefit, no fee policy, but to ensure your company receives the maximum benefits available so that it can continue to innovate and succeed in an increasingly competitive environment.

Want to know if a recent, or potential project, will qualify for R&D tax relief? Just ask us here.


Encouraging R&D with Staffordshire’s Local Specialist

If you work at a Staffordshire-based business, then you are right in the heart of the region that will benefit from the UK Government’s investment in the Midlands Engine Strategy.

The Midlands Engine Strategy, which is gaining momentum, is set to help the Midlands region including Staffordshire, Tamworth and Birmingham, to invest and maximise trade potential; supporting enterprise and innovation for a more dynamic regional economy.

Many Staffordshire businesses are planning to take advantage of the extra support provided through this strategy by undertaking research and development (R&D) work. This of course has its own rewards, such as gaining a competitive advantage, but that’s not all that makes R&D activities an appealing prospect.

R&D Tax Claims through Staffordshire R&D Specialist

Staffordshire businesses have been turning to a local Staffordshire R&D Tax Specialist, Nick Biden, to help them submit R&D claims which enable them to receive a reduction in their corporation tax bill, or a cash incentive. This not only helps mitigate  the costs incurred from R&D projects, but also helps Staffordshire businesses contribute to the success of the Midlands Engine strategy.

Unlike general accountants that hold only superficial knowledge of the R&D Tax Relief Scheme, Nick is trained and experienced in the complexities of the scheme. This means that he understands exactly which R&D activities qualify, as well as the specific details that need to be included to make R&D claims successful.

As a R&D Tax Specialist in Staffordshire, Nick holds an expert knowledge of the region’s industries and regularly works with local companies to improve R&D opportunities. With over 26 years’ experience within the industrial engineering, water, nuclear, power and process industries, Nick holds extensive knowledge in even the most complex areas of R&D.

So, whichever industry your business operates in, using an experienced Staffordshire R&D Tax Specialist like Nick, will ensure that your R&D tax claim is handled professionally, and accurately formulated to extract the optimum value of eligible costs.

R&D Services for Staffordshire Businesses

 To take advantage of future R&D activities perhaps prompted by the Midlands Engine, or to claim for R&D projects that have been conducted in the past two years, Staffordshire businesses rely on Nick for expert evaluations.

As a Staffordshire R&D Tax Specialist, Nick works with local businesses to:

  • Review previous R&D Tax Credit claims to see if claim amounts are above, below or around the average for their sector
  • Scope the potential of future R&D projects, to establish the benefits that can be achieved, including possible claim amounts
  • Prepare and submit accurate R&D tax relief claims
  • Deal with the HMRC during the period that the HMRC are considering the R&D tax claim

However, rather than having to outlay costs to start the process like other R&D tax businesses, using Nick as your Staffordshire R&D Tax Specialist means that fees are eligible for payment after the benefit has been received; supporting your Staffordshire business to maximise cash flow, in other words, no benefit, no fees.

As an experienced R&D Tax specialist in Staffordshire, Nick can also provide expert advice on activities that qualify for R&D tax credits2.

If you work in a business based in the Midlands, such as Staffordshire, Tamworth or Birmingham, then your local R&D Tax Specialist Nick Biden will work with you to identify the maximum costs that can be reclaimed from R&D activities.

To find out how you can make the most of opportunities to increase R&D activities and receive a valuable cash payment or tax reduction, contact Nick at R&D Tax North West here today.




2: Blog on website: Does My Project Qualify for R&D tax credits


Reducing Costs for Precision Engineering R&D

Whether it’s in the engineering, manufacturing or fabrication industry, the fundamentals of precision engineering are the same… to take theory and turn it into reality.

Which is why the typical focus of precision engineering often lies in developing ultra-precision technology to create incredible accuracy, improved quality, greater modernisation, better cost reductions and extended life spans.

It therefore makes sense that the activities conducted within precision engineering are often considered as research and development (R&D); because activities are conducted in order to push the boundaries and achieve further advances within the fields of technology and science.

This R&D qualification means that manufacturing or fabrication businesses that conduct precision engineering can gain access to a government incentive to reduce corporation tax bills. So why is it that this incentive is often overlooked or dismissed?


R&D Tax Relief for Precision Engineering Projects

The reason that some manufacturing or fabrication companies aren’t claiming R&D tax credits is simply because they feel that making a R&D tax claim is confusing and complex; that their time would be better spent on continuing their business activities.

In some respects, they are right. Identifying eligible R&D activity accurately is a challenge, simply because the considerations are so broad. However, that definitely doesn’t mean that R&D tax claims should be overlooked. These claims can go a very long way in supporting businesses in continuation of their efforts in precision engineering, by providing financial support that helps to  offset the costs of the R&D activities conducted.

So rather than avoiding the complexities of making an accurate R&D tax claim, it is possible to simply pass the hard work over to R&D specialists. These specialists can then evaluate your projects to establish if R&D activities took place, and then complete the R&D tax claim on your behalf. All you’ll need to do to start the process is identify projects where R&D activities may have taken place so they can be considered by our R&D expert.

To help you do this we’ve put together some helpful information.


Are You Conducting R&D Through Precision Engineering?

You may have conducted many projects using the tools and knowledge of precision engineering, however there are only certain projects where the activities conducted are eligible for R&D tax relief.

The R&D guidelines provided by the HMRC say that these projects should seek to extend overall knowledge or capability in a field of science or technology. In other words, if the project is pushing the boundaries of physics, mechanics or electronics, (for example by developing flexible phone screens) then certain costs associated with the development activities could be claimed.

The eligibility for these projects also extends to:

  • Using new knowledge or capabilities to make something new
  • Making improvements to an existing product or process; perhaps making it cheaper, with less waste or with greater reliability
  • Making something that already exists, but in a completely different way

Of course, with many activities in precision engineering aiming to improve tolerances (both individual and stack), improved assembly and dimensional stability then it can be difficult for engineering, manufacturing and fabrication firms to identify which activities are eligible for R&D tax relief.

However, as we’ve evaluated and submitted many R&D claims for precision engineering, we can identify areas when R&D is most likely to be carried out, for example:

  • When it’s necessary to make special tools or jigs to assist in development. Tools or jigs for production are not eligible for R&D claims.
  • The need to make prototypes, perhaps to test new processes, unusual materials or shapes.
  • When the time to manufacture a first of type is greater than a production norm; that is the first process / product taking longer to achieve as compared to the mature, steady state of production.
  • When manufacturing processes are changed to improve the target output, such as conducted to improve a Cpk or Ppk
  • Investigations into process failures. When components or assemblies fail to achieve the required output / tolerances, becoming scrap. The process of investigating the cause of the failure could be eligible as R&D.
  • In service failures, where investigations are also required into identifying and solving the root cause.

If you can identify a project, or particular effort that was made to achieve a solution, or enhancement then that’s a start. For that precision engineering effort to be eligible for R&D tax relief, there would, typically, have to be no obvious solution, or route to success available to your business or in the public domain; basically, the project was started without truly knowing how to solve it, or even if it would be successful. Alternatively it may be that the obvious solution proved unsuccessful or impractical for any reason and there was no credible alternative.

The good news is, that R&D tax relief is based on the costs associated with the development stages, so even if the end product or goal was not realised, the efforts made to overcome the challenge could be eligible. This includes receiving relief on a proportion of the costs, such as salaries of those involved in the development as well as some of the materials used in testing and prototypes – a useful amount that could definitely be put to good use for further precision engineering projects.

So rather than dismiss R&D tax relief for precision engineering, why not use it as an incentive to pursue new and challenging projects; to offset R&D losses from efforts made in the past two years or to help you invest in new precision tool technology.

It all starts with a phone call where you will receive expert, friendly advice that will help you determine if you really can benefit from this useful UK government incentive for precision engineering R&D.

For further information on how much you can receive back, visit this page.