@TheBusJourney #SMEJourney

The Business Journey

4 November 2014

@TheBusJourney #SMEJourney

Ian McMonagle

Chartered Accountants

Chartered Tax Advisers

Business Development Specialists

SME

• Less than 500 employees

• Annual turnover not exceeding €100m

• Balance sheet not exceeding €86m

R&D Purpose & Criteria

• To advance science or technology

• To achieve an advance on knowledge

• To develop new products or services

• To solve technological uncertainties

• But it’s not just for boffins in white coats working in

labs!

Some stats from HMRC

• Since launched for companies in 2000:

• More than 28,500 different SMEs

• More than 7,000 large companies

• More than 100,000 claims made

• More than £9.5 billion in tax relief claimed

• 15,930 claims in 2012/2013 (up 26%)

• £1.4billion claimed in 2012/2013

Some more stats for you…

• 46.6% of all claims

• 65.9% of the total amount claimed…

• Companies with R.O.s in London and the East

and South-East of England

• Claims increasing year-on-year:

• Claims increased by average 7% p.a.

• Value increased by average 14% p.a.

And in Scotland?

• 2012/2013:

• Less than 500 claims

• Approx £50million claimed

• (Based on Registered Offices)

• HMRC estimates that 150,000 SMEs in the UK could

claim but have never claimed.

• Average SME claim at £50,000 = £7.5bn going unclaimed

that could result in £1.5bn being injected back into the UK

business economy.

Who is claiming?

• By far the biggest is manufacturing,

• then Scientific and technical,

• then Information & Technology

• But it doesn’t stop there.

Typical qualifying activities

Aeronautical Engineering, Agriculture, Automotive Engineering,

Biotechnologies, Brewers, Chemical industries, Communication,

Construction, Distillers, Drinks Manufacturers, Electronic Engineers,

Engineering, Environmental, Finance & Insurance, Forestry &

Fishing, Food Manufacturers, Gaming, Information Technology,

Manufacturing, Medical Devices, Medical Services, Mining &

Quarrying, Packaging, Pharmaceuticals, Print, Product Design,

Renewable Technology, Science……

• …Software and games development, Telecommunications,

Transport & Haulage, Waste Management, Water, sewerage &

Waste, Wholesale & Retail Trade.

• You are limited only by your imagination!

R&D Tax Relief

• Companies can deduct up to 225% of qualifying

expenditure when calculating taxable profits.

• Current year + 2 previous years

• Example: £100,000 claim x 225%

• @ 20% tax = £45,000 tax saved.

R&D Tax Credit

• Tax Credit Relief: 225% x 14.5%

• Example: £100,000 x 225% x 14.5% =

• £32,625 payment to company

• Even if it has never paid tax!

• Particularly welcome for new and fledgling companies

• Capital expenditure

• Grants received

• Sub-contracting the work

How to claim

• Not in the accounts

• Claims made to HMRC

• Company’s tax return (CT600)

• Amendment to previous tax returns

• Supporting calculations

• Supporting report

• Plain English is best

• Don’t forget deadlines

Business Journey Challenge

• 100 delegates present today

• Find 2 qualifying companies each

• 200 x £50,000 = £10million

• @ 20% tax saved = £2million injected into our local

economy

@TheBusJourney #SMEJourney

Questions for Ian?