Innovation in Life

Specialist Research & Development Tax Credit/Refund experts

What are HMRC Research & Development (R&D) Tax Credits/Refunds?

Is your business eligible for HMRC R&D Tax Credits/Refunds and who qualifies?

About Innovation in Life Limited

Examples of businesses our experts have helped claim their R&D Tax Credits/Refunds

Four simple steps to make your claim

Frequently Asked Questions about HMRC R&D Tax Credits/Refunds

Contents

1234

56

R&D Tax Credits/Refunds are a Government incentive introduced under Tony Blair in 2000 to stimulate innovation and encourage Companies to engage more in Research and Development projects, it is still in place today under Boris Johnson. R&D can take place in any sector in any Company from cheese-making to manufacturing from construction to digital development. It is designed to reduce a Company’s tax bill to help compensate UK Companies for investing in improving the way they do business and overcome problems. You don’t need to have created a new product, process or service, just overcome a problem which could be large or small physical or technical. In 2017-18 over £4.4bn was paid to over 50,000 UK Companies of all types and all sizes. Innovation in Life Limited are specialists in helping your Company access the HMRC R&D Tax Credits/Refunds you are entitled to, easily, quickly, and accurately. If you are uncertain if your Company is eligible to claim HMRC R&D Tax Credits/Refunds, contact us today, for a no-obligation chat with one of our expert and friendly advisors.

Tel. 020 7052 8323

What are R&D Tax Credits/Refunds?1Your estimated tax incentive

£50,000

Estimated R&D activity Estimated tax refund

£12,350

£250,000 £61,750

£500,000 £123,500

£1,000,000 £247,000

The average claim by SMEs in the UK is £61,514 (2015-16)Our expert R&D tax specialists help SMEs (Small to mid-size enterprises) across all sectors receive millions of pounds every month to reinvest back into their business. Most Companies even startups fall into this category and can claim up to 33p for every pound spent on R&D.The table above is an approximate example, your exact return will depend on the qualifying R&D activities and costs that the expert chartered tax advisers identify.

The good news is over 90% of businesses are eligible. To benefit from HMRC R&D tax incentives, you must:

Be a UK Limited Company that is subject to Corporation Tax

Have carried out qualifying Research and

Development activities As you have seen HMRC’s Research and Development (R&D) Tax Credits/Refunds can take place in any sector.

Is your business eligible for HMRC R&D Tax Credits/Refunds and who qualifies?

Eligible Industry Sectors Agriculture, Forestry, Fishing, Mining & Quarrying, Manufacturing, Electricity, Gas, Steam and Air Conditioning, Water, Sewerage, and Waste, Construction, Wholesale & Retail, Trade, Repairs, Transport & Storage, Accommodation & Food, Information & Communication, Financial & Insurance, Real Estate, Professional, Scientific & Technical, Admin & Support Services, Public Admin, Defence & Social Services, Education, Health & Social Work, Arts, Entertainment & Recreation. If you don’t see your sector here don’t worry just give us a call there is every chance it will be included and eligible

It occurs in every Company from cheese-making to chemical engineering, and construction to digital development. If you have a Company employing 10 or more people you will probably qualify for HMRC R&D Tax Credits/Refunds. Just give one of our expert advisers a call to find out if you qualify Tel. 020 7052 8323 Come and meet us at our offices: 1 Knightsbridge Green, London SW1X 7NE for a no-obligation free assessment of your company’s R&D. The coffee is good, and the advice will be life-changing.

2

3Innovation in Life Ltd is a Brokerage specialising in advising clients on how to

claim the Government’s HMRC Research & Development (R & D) Tax

Credits/Refunds. Innovation in Life helps Companies claim HMRC R&D tax

relief, refunds, credits and entitlements allowing innovative Companies

to grow through securing these funds.

Innovation in Life’s sole focus is on HMRC R&D Tax Credits/Refunds and they

have helped many Companies in all sectors claim so you can rest assured your

claim is being handled by highly-skilled, experienced specialists from the

largest and most successful HMRC R&D Tax Credit/Refund Company

in the UK.

Innovation in Life has the advantage of a unique and cutting edge claims

system, ensuring that Clients receive the maximum entitlement while using as

little of their precious time as possible. Innovation in Life’s key goal is to deliver

outstanding, unique, trouble-free claims service to all Clients.

Innovation in Life also receive numerous referrals as they consistently

achieve exceptional returns for their clients who trust them to deliver the

same high-quality award-winning service to Companies within their network.

About Innovation in Life

Incentives

We enjoy a100% claim success rate thanks to our experts approach to the claim preparation process

Our experts have increased someexisting claims by up to 200%

Number of claims received for R&D Tax Credits/Refunds by scheme, 2000-01 to 2017-18

Industry Sector analysis of R&D Tax Credit/Refund claims, 2017-18

Cost band analysis of R&D Tax Credit/Refundclaims, 2017-18

Total R&D expenditure used to claim R&D Tax Credits/Refunds by scheme, 2000-01 to 2017-18

Examples of businesses our experts have helped claim their R&D Tax Credits/Refunds

4Mechanical Engineering FirmThis firm designs and manufactures machines used in the food and beverage sector. The machines sterile-fill food products into packaging. Our client wanted to create two exact dosing mechanisms that would seal the packaging using the friction of this filling motion. The difficult part was to ensure the large force required worked without damaging the packaging. The firm achieved its goal.

Product Design StudioThis product design studio creates innovative childcare and medical technology products. Seeing too many design shortcomings in existing electric wheelchairs, they decided to apply a fresh approach. After numerous prototypes, they landed on a new electric wheelchair design that gives users better manoeuvrability, comfort and access.

Automated Production Line DesignersThis designer and producer of robotic production lines had a client who serves some of the biggest names in the aerospace, automotive and hydraulic industries. That client had expanded quickly and acquired a new site in a very old factory. It wanted to transform these premises and its operational capability into the largest 6-axis ma-chining centre in the UK. This required the development of a specialist production line solution designed specifically for this site.

Software Consultancy This software consultancy was asked to build a new suite of mobile applicationsfor a client in the financial services sector. The applications needed to integrate with an investment platform, and therefore dovetail with legacy backend systems which were disparate and outdated. As the backend system wasn’t designed for mobile applications, they had to redesign the API endpoints in order to successfully integrate all the systems.

Waste-To-Paper ProducerThis company transforms agricultural waste by converting it into biodegradable and compostable paper. One project saw them working with a country that produces sugar-cane waste and doesn’t have the infrastructure to recycle it. They researched and developed ways of creating a sugarcane-derived paper that’s attractive to European markets. This has also benefited sugar cane farmers in developing countries by providing income.

£1.2m Turnover £20,000 Benefit £700k Turnover £60,000 Benefit £2m Turnover £20,000 Benefit

£1.9m Turnover £27,000 Benefit £5m Turnover £90,000 Benefit

Digital AgencyThis innovative digital agency was challenged with integrating their retail client’s stock systems with the API of an ecommerce platform. The client wanted minute-by minute updates on stock to be shared between a store’s local records and the online store. There was no evidenceof this being done with the API available on the market. Custom middleware to seamlessly connect the systems was created, whichsignificantly improved their client’s ecommerce system.

£14m Turnover £380,000 Benefit

ArchitectsThis leading Architect firm had a unique challenge when they designed a multi-purpose sports facility, with restricted plot size. The outcome was a building that allowed two markedly different climates one hot and the other cold, to co-exist in a small plot, using a floating floor. A year’s worth of concept and design work went into the project to arrive at systems that worked within acceptable physical parameters and the limits of the budget.

Full-Service Civil Engineering Company

As part of a wider project, this Company was tasked with repairing a concrete weir structure. To complete the work, they would need to completely divert the water, but this wasn’t possible due to the weir’s age and surrounding endangered wildlife. After trying several diversion methods, the the company designed a phased approach of blocking the water flow, allowing them to successfully carry out the remedial works.

Building Services CompanyThey were asked to supply the mechanical and electrical services for a research facility. The facility had to remain functional whilst the Company undertook the work, so it developed a temporary HVAC system to be used whilst the existing system was being replaced. The site was highly radioactive and so the systems needed to be effective when in contact with radiation. A lead brick inner skin was added to the site to reduce the effect of radiation.

Housing DeveloperA leading housing developer wanted to ensure that their development was sustainable from the ground-up and was sympathetic to its environment. They carried out a number of R&D projects to achieve this. Their activities included exploring new ways of removing contaminants from the land. And they created a new sustainable urban drainage system which is as effective as standard drainage.

Electrical Installation CompanyThis Company was asked to design and install an electrical system for a large UK hospital. As the project was within a working hospital building, the company had to work to a tight deadline to minimise disruption. Existing installation techniques wouldn’t allow for a swift installation, so the Company had to create a new modular system. This resulted in much less time on-site as all construction could be manufactured away from the hospital.

Precision Glass Engineering CompanyThis high-performance glass specialist makes components for precision instruments. They were commissioned by the armed forces to develop and manufacture a rebated prism design. This needed to withstand extreme heat from jet thrusters,contrasting cold seawater and powerful light shining through. They achieved this using borosilicate glass, prototypes of which they tested and re-tested until they met the required standards.

Electrical Manufacturer A market-leading manufacturer of electric equipment wanted to manufacture an existing product more efficiently. They had great success in developing a prototype product that was more cost-effective to manufacture and had increased performance. IIL’s experts also introduced more robust processes for recording R&D expenditure which will help the business make larger, more precise R&D Tax Credit/Refund claims in the future.

Precision Tube Engineering Company This precision engineering Company manufactures tubes and tube assemblies. They were approached to design and create a system that would keep the piston crown cool in one of their client’s diesel engine designs. They created a system that would be able to cool a moving piston. In order to do so they needed to reverse the usual tooling to enable them to assemble a new con-figuration for directional cooling jet flow.

£68m Turnover £1,250,000 Benefit £18m Turnover £350,000 Benefit

£53m Turnover £345,000 Benefit £26m Turnover £400,000 Benefit £4.5m Turnover £90,000 Benefit

£8m Turnover £400,000 Benefit £8m Turnover £50,000 Benefit £18m Turnover £350,000 Benefit

Waste-To-Energy SpecialistThis start-up is disrupting waste management for SMEs by making affordable waste-to-energy solutions.One project has involved developing ground-breaking technology that addresses hazardous waste destruction. It provides an alternative to conventional waste landfill for island nations lacking space. The new technology produces usable energy with low gaseous emissions and near-zero fly ash, from a diverse range of waste streams.

£1m Turnover £30,000 Benefit

Step 1: Discovery and assessmentThe first step is the telephone call (30 minutes - finance and project team) to arrange an exchange of information relating to costs and projects.

Step 2: Analysis and documentationReceive projects and costs, evaluate records available, design and agree to methodology, project interviews, and report production. This will take about half a day working with your finance and project teams. (our experts will be working for 2 to 3 weeks with this information on formulating your claim.)

Step 3: Approval and submissionIt usually takes around 2 hours to read the reports, approve them and check the numbers. The claim will also be reviewed by our former HMRC Tax inspectors. The average time from our first step call to receiving your benefit will be around 10-12 weeks, with only 6 to 7 hours overall of your Company’s time needed to complete a claim.

Step 4: You get paid your claimIt usually takes around 28 days to receive your claim from HMRC.

Four simple steps to make your claim

Incentives The average claim by SMEs in the UK is £61,514 (2015-16)

SME Companies can benefit from a reduction in Corporation Tax equivalent up to 33% of R&D expenditure, this claim can be retrospectively claimed for the previous two years trading from the relevant accountingperiod.

5

Frequently asked questionsabout R&D Tax Credits/Refunds

Q. Can pension contributions be included in a R&D tax Credit/Refund claim?A. Employer pension contributions are classed as qualifying expenditure for the purposes of a Research and Development (R&D) Tax Credit/Refund claim. As long as the staff member is involved in your R&D project, you can include their employer pension contributions in your claim.

Q. What costs qualify for R&D Tax Credits/Refunds?A. Eligible R&D Expenditure Revenue includes the following costs which can be included in your R&D claim: Staffing costs, Subcontracted R&D, Externally Provided Workers (EPWs), Consumables, Software, Payments to the subjects of clinical trials.

Q. How do you identify how much R&D each staff member does?A. There are a number of ways of identifying how much Research and Develop-ment (R&D) work each staff member does. The way an employee’s time is allo-cated will depend on the nature of the R&D work you have undertaken and what records you have on how staff time was spent on these activities.

Q. What happens if I have no records of my R&D?A. Record-keeping is an important part of a Research and Development (R&D) Tax Credits/Refunds claim. HMRC expect to see some form of records. Good records often serve to maximise a claim’s value. If you have no specific records for your R&D Tax Credit/Refund claim, all is not lost. Call us we can help.

Q. How far back can I claim R&D Tax Credits/Refunds?A. The Research and Development (R&D) Tax Credit/Refund claim time limit is two years from the end of your accounting period. Before this period ends you must submit a R&D Tax Credit/Refund claim for any qualifying expenditure that you’ve identified during that period.

Q. I’ve heard the phrase ‘competent professional’. What is this?A. A competent professional is someone in your Company who has a successful track record, notable experience and skills or qualifications in your relevant area of science or technology. For software projects, this may be a developer; or, in a manufacturing business, it might be an engineer.

Q. Can you include VAT in an R&D Tax Credits/Refundsclaim?A.You cannot normally include VAT costs within a R&D Tax Credit/Refund claim. The exception to this rule is if your VAT costs are not recoverable through a VAT return. Whether this applies to you or not will depend on your VAT classification.

Q. How do I know if I’m carrying out R&D?A. If you are creating a new- or improved product, process or service, your business might be carrying out Research and Development (R&D). You will probably be attempting to solve a problem where no solution is evident. This can take many forms and R&D projects can include work undertaken for a client as well as your own business activities.

6

Q. What records do I need to keep for an R&D tax credit/refund claim?A. There is no fixed record-keeping system for a Research and Development (R&D) Tax Credit/Refund claims. HMRC accept that first-time claimants are unlikely to have detailed contemporaneous records to support all their R&D work.

Q. Do employee expenses such as travel and subsistence costs qualify for R&D? A. Some types of reimbursed expenses can be included in Research and Development (R&D) Tax Credit/Refund claims. A company may reimburse expenses incurred initially by an employee, and such reimbursement may constitute qualifying staffing costs.

Q. Is there a minimum amount of expenditure for R&D Tax Credit/Refund claim? A. No, you do not need to have spent a minimum amount on qualifying Research and Development (R&D) to submit a R&D Tax Credit/Refund claim to the HMRC.

Q. How long does it take HMRC to review a R&D Tax Credit/Refund claim? A. HMRC aims to process Research and Development (R&D) Tax Credit/Refund claims for SMEs within 28 days. However, the length of time it takes for HMRC to review an R&D Tax Credit/Refund claim will depend on the complexity of your structure and accounts, as well as the nature of the claim itself. It may also depend on what time of year your claim is submitted.

Q. Do R&D Tax Credits/Refunds apply to a sole trader?A. Research and Development (R&D) Tax Credits/Refunds can only be claimed by companies that are liable to pay UK Corporation Tax. Sole traders do not pay UK Corporation Tax and, as a result, they cannot claim R&D Tax Credits/Refunds.

Q. How long does it take to receive my money?A. HMRC aim to make payments within 28 days for SMEs claiming Research and Development (R&D)Tax Credits/Refunds. Corporation Tax repayments can be much quicker and sometimes come through within a week of your claim being filed.

Q. Can I claim R&D Tax Credits/Refunds on subcontractors?A. Yes, an SME carrying out Research and Development (R&D) will usually be able to claim 65% of the costs paid to any subcontractor for qualifying activities.

Q. How will I receive my R&D Tax Credits/Refunds?A. You might receive it as a cash payment, a Corporation Tax reduction, they carry forward or back of an enhanced loss or as a blend of these.

If you have any other questions regarding R&D Tax Credits/Refunds please call 020 7052 8323, our experts will be happy to answer all your questions.

Contact list

Company Name:

Company Address:

Contact Name:

Mobile: Email:

Year End:

Company Registration:

Number of staff PAYE:

Turnover 2018: Turnover 2019: Turnover 2020:

1 Knightsbridge Green, London SW1X 7NE Tel: 020 7052 8323 Email info@innovationinlife.co.uk Web. www.innovationinlife.co.uk