Case Studies

Satellite science company – space satellite streams

The UK is a ‘leader’ in European Satellite Sciences, developing ‘hard technology’
capable of propulsion and deep exploration in mid hemispheres. This has spawned a
cluster of ‘support’ companies harnessing the data and carrying out vast scientific
research programmes of global significance in their contribution to our understanding
of the world around us and deep ocean / deep space environment.

We have been able to advise cluster SME companies on a range of tax issues affecting
science and technology companies following the award of a large research contract for
polar ice cap displacement analysis and measurement.

The tax issues simplified for the company included:

  • An employee share scheme
  • Advice on patent box following unique scientific research measurement analytics.
  • Ongoing support with compliant RDTR claims and the impact of GRANT FUNDING (see aside) from the Horizon programmes.

Construction, Engineering and Construction Materials Group

This group of UK companies included operations around the EU and Ireland. The company had invested heavily in pioneering civil engineering techniques and had patented at the rate of around two processes per year. Their accountant was aware of RDTR and referred the company to us. Over the course of six months, meetings were held with project managers and substantial R & D activities were analysed and quantified. The group were able to recover substantial corporation tax levies; some of the loss making companies in the group secured repayments of PAYE taxes through the R & D tax credit scheme.  TI was able to help the group through the complexities of staff provision arrangements, and a centrally run payroll for key operations.

Financial Sector Technologies – System integration engineering.

The company had been in the bespoke end of financial products for a number of years. It carried out significant modelling and analytical work before marketing new product offerings to clients and is FSA regulated. Such work is NOT within the RD scheme, however we were able to support the company identify projects that are within the tax definition of R D . Speaking to the analysts and company director, several IT engineering projects were within the R & D guidelines given the system size and advance in technology sought. The company can move forward with the added benefit that it can evaluate its activities in this dimension each year and comply with the complex ‘definition of R & D’ legislation.

Chemical manufacturing company

The company has multi national RD operations and needed detailed advice on UK corporation tax, RDTR compliance and filing and employment contracts / UK PAYE obligations. We were also able to support the company with efficient laboratory space identification and a ‘share incentive’ scheme for UK staff.

Engineering technologies : North Sea Oil Exploration

Did you know, the UK is one of the foremost countries in the field of oil and petro chem exploration technologies? Not only can we boast ideal on site exploration sites for prototype systems, but numerous specialist engineering companies, each with their own testing and analysis laboratories. UK companies are one of the global leaders in this important field of technology specialising in quantum analytics and prototype futuristic deep-sea tech.
We have assisted a number of companies within this specialist field of technology, if your company is a ‘specialist engineering’ company, you should speak to our Partner contact for detailed insight on funding opportunities to support your RD investment programme.

Deep-Tech; Immersive Technology; Software engineering.

Often, software engineering is an ‘ordinary’ field of technology and we are unable to support potential RDTR claims as nothing ‘extraordinary’ really takes place, despite the complexity involved, the company is often case ‘using’ technology with no real significance to the area of tech involved.

However there are a number of ‘deep-tech’ technologies at play and our science and technology parks abound with all types of companies seeking fundamental advances in all types of computer engineering, including AI; Robotic tech; and vast data storage and integration technologies capable of worldwide global deployment.

The only ‘clear picture’ in the RDTR legislation for ‘tech companies’ is that full analysis of what technological operations constitute an ‘advance in technology’ is required. We have helped a number of pure technologies companies navigate the digital landscape through which they journey, including advice on buy-out and acquisitions.

Healthcare technologies

Some of the most important healthcare technologies of the future are being formulated and prototyped in UK science and technology parks. We are familiar with handheld diabetic monitors and all types of health care monitors. As the sector booms, RD investment is heading towards sophisticated ‘real-time- pathogenic analytics as well as sophisticated optical and auditory measurement technologies. If you are in this important sector of technology, we are happy to provide a free consultation on work that complies with HMRC guidelines and regulations as well as general corporation tax advice on a UK and global basis. Speak to us!

Automotive technologies

As the EV evolves and resources become finite and costs higher, so the automotive industry and the marketplace for sophisticated components continues to leap forward in technologies that would astonish the vehicle manufacturer of even 10 years ago. We have been able to support a range of companies, including micro companies, with full corporation tax advice:

Development and manufacture of robotic transit vehicles; progression towards robotic haulage automation and prototype EV lorry and truck operations.

Novel battery component technologies, geared towards ‘lightweight’ advanced materials.

Specialist manifold and exhaust technologies made with ‘futuristic’ materials that can withstand ultra high heat and high pressure environments.

If you are a company within this important sector, do get in touch.

STEM TAX LTD

The company has specialised in personal and corporation tax for companies within a
broad range of Science, Technology, Engineering and Mathematics’ disciplines. Find us
in the UKSPA directory or read our books for the most up to date advice on tax and the
innovative company!

Contact:

Maria Kitt
Partner – STEM Tax Limited,
Author – UK RDTR Reliefs, Bloomsbury Professional Press (5th edition)
UK Corporation Tax, Bloomsbury Professional Press (annual edition, 2024)
Taxation Magazine, Lexis | Nexis Publications.

What is R & D Tax Relief?

The UK Government’s R & D strategy encourages innovative companies who are contributing to the UK’s export of technology. European Union member countries set a goal of increasing R&D investment intensity to 3 per cent of GDP by 2010 in the Lisbon Agenda of 2000. Such targets are not limited to Europe or the OECD with China committing to a R&D intensity target of 2.5 per cent of GDP by 2020. The 2010 Dyson Report aims for the UK to be a leading EU exporter of high tech goods and services. The UK’S R & D policy has both a fiscal drive and a range of grants and subsidies for innovators of all sizes, from the small company to the R & D performer in a complex worldwide group. Tax Insight is able to help with this choice and assist innovative companies with value added supportive corporate tax strategy.

UK R & D Tax Relief

There are two schemes. The 2000 Finance Act introduced the UK R & D tax credit scheme for SME companies spending a minimum of £25,000. This was supplemented on 01 04 2002, with the ‘Large Company’ scheme.
The definitions for UK R & D are broad enough to permit claims from any business sector carrying out eligible work. The term ‘R & D’ is based on the Statement of Standard Accounting Practice [SSAP 13], which is then narrowed for tax purposes by the BIS Guidelines of both 2000 and 2004 and tax legislation. R & D for tax purposes takes place when a project seeks to achieve an advance in science or technology…..Click link below to read more

SME Scheme

An SME can deduct 225% of R & D project costs as a tax relief. Loss making companies can surrender R & D losses for cash of up to 25% of direct R & D costs.
Click here to read more…

Large scheme

A Large company is a concern that is not an SME.

From 01 April 2013, there are two R & D schemes open to Large companies. The Legacy CTA 2009 Scheme enables Large companies to claim up to 130% of R & D project costs as a tax relief. The new ‘R & D Expenditure Credit’ enables loss making Large companies to claim an ‘Above the Line’ repayable credit of 10% from 01 April 2013. The credit is taxable. Read more

ELIGIBLE COSTS:

SME and Large Companies can claim relief for these costs:

  • Staffing costs – Including some of the costs for people not directly employed by the Company
  • Software and consumables – including project overheads
  • Equipment and Intangible Expenditure
  • Contributions to independent research

Useful to know:

  • For every £100k of ‘eligible’ costs, an SME can claim an additional tax deduction of £125,000, this might
    secure a tax saving of £ 25,000, tax–free
  • Equipment used in an R & D project qualifies for special capital allowances of up to 100%; particularly useful
    in 2012 and 2011, when AIA was capped at £50,000.
  • Unlike many EU R & D tax regimes, a UK company can carry out R & D activities anywhere in the world.