Due to rapid technological changes over the past few years, it has become the norm that Research and Development claims are now becoming more outsourced due to the expert and specialist knowledge required to maximise each individual claim.
Having and outside perspective to analyse and investigate on your behalf can be more beneficial than trying to carry it out in-house or through your own accountant. The reason being that a fresh view from an impartial perspective can often flag up areas which constitute as R&D which may have otherwise been overlooked.
Working closely with a claim manager means maximum results can be achieved. What your business perceives as a standard industry anomaly, may in fact constitute more towards a claim by simply changing an approach or integration of new methods or technologies to gain the same, similar, or different outcomes or results.
Considering the future, when it comes to undertaking completely new R&D projects that are unlike anything that you have done in the past, or if this is the first time your company is investing in R&D, outsourcing can be much cheaper and faster rather than setting everything up in-house. This is because they will have tried and tested systems and processes in place to ensure the project is delivered to the agreed specifications. Outsourcing also helps to keep your business and its resources focused on what it is already doing best.
R&D reliefs 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.
You may be able to claim Corporation Tax relief if your project meets the governments definition of R&D.
Projects that count as R&D
The work that qualifies for R&D relief must be part of a specific project to make an advance in science or technology. It can’t be an advance within a social science like economics or a theoretical field like pure maths.
The project must relate to your company’s trade - either an existing one, or one that you intend to start up based on the results of the R&D.
To get R&D relief you need to explain how a project:
· looked for an advance in science and technology
· had to overcome uncertainty
· tried to overcome this uncertainty
· couldn’t be easily worked out by a professional in the field
Your project may research or develop a new process, product or service or improve on an existing one.
Show that you looked for an advance in the field
Your project must aim to create an advance in the overall field, not just for your business. This means an advance can’t just be an existing technology that has been used for the first time in your sector.
The process, product or service can still be an advance if it’s been developed by another company but isn’t publicly known or available.
Show there was uncertainty
You should be researching or developing something that isn’t known to be scientifically or technology feasible when you make or discover it.
This means that your company or experts in the field can’t already know about the advance or the way you achieved it.
Explain how you tried to overcome the uncertainty
You should show that the R&D needed research, testing and analysis to develop it.
You need to be able to explain the work you did to overcome the uncertainty. This can be a simple description of the successes and failures you had during the project.
Show that a professional in the field couldn’t work this out
You should explain why a professional couldn’t easily work out your advance. You can do this by showing that other attempts to find a solution had failed. You can also show that the people working on your project are professionals in that field and get them to explain the uncertainties involved.
Types of R&D relief
There are different types of R&D relief depending on the size of your company and whether the project has been subcontracted to you or not.
Small and medium sized enterprises (SME) R&D Relief
You can claim SME R&D relief if you’re a SME with:
· less than 500 staff
· a turnover of under €100m or a balance sheet total under €86m
You may need to include linked companies and partnerships when you work out if you’re a SME.
SME R&D relief allows companies to:
· deduct an extra 130% of their qualifying costs from their yearly profit, as well as the normal 100% deduction, to make a total 230% deduction
· claim a tax credit if the company is loss making, worth up to 14.5% of the surrenderable loss
Research and Development Expenditure Credit
This replaces the relief previously available under the large company scheme.
Large companies can claim a Research and Development Expenditure Credit (RDEC) for working on R&D projects.
It can also be claimed by SMEs and large companies who’ve been subcontracted to do R&D work by a large company.
The RDEC is a tax credit for 11% of your qualifying R&D expenditure.
Information courtesy of www.gov.uk
We have been searching for a strategic partner for quite some time however have found it hard to get the right fit. We first came across Liability and General Insurance Brokers Ltd through a very positive recommendation from a mutual acquaintance. After undertaking further research, we found that Liability and General Insurance Brokers Ltd would be a perfect partner that would be able to offer the high standards of customer service and expert insight that HC Prospects pride themselves on. Not only this, Liability and General Insurance Brokers Ltd’s track record in being able to find strategic savings for their customers was very impressive, with an average saving of circa 20% on commercial insurances.
HC Prospects director, Declan Carrington stated ‘ Liability and General Insurance Brokers Ltd are a fantastic company that prove how good they are through their actions and not their words. Their level of expertise and attention to details is what set them apart from their competitors. ’
‘ It is through this expertise and attention to detail that they are able to provide elevated levels of savings as seen across their portfolio. We are grateful to be able work alongside such a great company and have full confidence in them to look after our customers’ .
The partnership will entail the two companies working closely to provide customers with those much-needed savings on commercial insurances.
customer of yours is wanting an hour of your time and for this they will give
you £5,000. There are no additional output costs for the customer so the only
expense is your time. Sounds like a fantastic customer, doesn’t it? This is the
opportunity that a lot of companies are missing out on. These opportunities are
Savings made are profits made
By lowering costs, you are in fact increasing your bottom line which is exactly the same as if you were to increase revenue. Unfortunately, the same amount of importance is not usually given to this area. When a supplier states it can save you £5,000, think of it more as a customer giving you £5,000. The same thing will happen to your bottom line, so why not look at them the same?
Weigh up the additional value to your business and the time you will need to spend on it, the same as you would a customer. How much time will you need, and how much can you save? If the time required is disproportionate to the savings, then it will not be worth it if it is then this is basically one of the easiest customers you will ever have.
Treat savings with a similar amount of attention as you would a customer. Would you make a customer wait weeks to get hold of you for a 5-minute conversation that could be worth £500 to you, most probably not? However, you find that this is what several business owners do with suppliers that can save them money, as they believe it is not urgent. It should be urgent, not for the supplier’s sake but for the company’s sake. Every month that you are paying those higher bills is another month where you are losing out on profits.
Subscription based customers
Another great aspect about savings is that they are usually recurring. Improving cash flow month after month, not just on one off occasions. It is reliable source to increase your bottom line, just as a customer who is paying a subscription service, however, savings are a customer you do not need to provide for.
Would you miss out on an opportunity for such an amazing customer?
We would not by any means state that all solicitors are overcharging their clients, in fact solicitors are fantastic people who can be very useful in times of need.
We do however believe that consumers should be aware of situations that might indicate overcharging. This blog is aimed at people who want to ask the question ‘ how do I tell if I am being overcharged by my solicitor?'.
1. Estimates – It is good practice that a solicitor provide a detailed estimate of works to be undertaken to their potential client. If you have not received this or have only been given a high-level estimate that is not very detailed, this could be a warning sign of future overcharging.
It is worth asking for an itemised estimate before you agree to go ahead with any legal work, as this will also be a good point of reference for when you receive your final bill. Failure to provide detailed estimates is an indication that there is little control of costs or focus in ensuring value for money to the client.
2. Interim bills - Unless there is an expressed agreement within the contract or retainer for the solicitor to submit interim invoices, the solicitor is only entitled (and only then in respect of contentious business) to request reasonable payments on account of work done and a reasonable amount for future costs.
Solicitors will often attempt to argue that bills sent during the course of the case cannot be challenged but that is not necessarily right. These interim invoices do not represent a final figure and therefore can still be challenged. A typical example of this is “ work undertaken on X in January 2017 ”
3. Surprisingly high bill – This may seem straight forward however, it’s hard for a usual client to establish if a bill is classed as surprisingly high. If after questioning the amount on the bill with the given solicitor they drop the cost, this may be an indication of overcharging in other areas.
4. Bill / Invoice format - It is good practice to agree with your solicitor when you instruct them that any bills they provide should be itemised. This allows you to check the level of your fees quickly and easily. This information is usually recorded on case management software so is available at the press of a button.
5. Right to challenge fees - A solicitor is required to advise you of how you can challenge your legal fees via the Legal Ombudsman or via assessment by the Court under the Solicitors Act 1974. Your solicitor should take the time to clearly explain this to you and the time limits for challenging your fees. If your solicitor has not discussed this with you or quickly brushed over your right to challenge their fees this can indicate that your solicitor is charging you unreasonably for the services they provide.
What to do if you believe you are being overcharged?
If you are curious as to whether your solicitor has overcharged you or not, please contact us at HC Prospects Ltd. We will arrange for an expert to contact you to establish if they believe there is a claim, they will also advise you on a way forward. This is a free, confidential service which we provide to our customers. If the expert believes there is a case to move forward with, all costs for this will be gathered from the overcharging solicitor, with no costs incurred by the customer directly.