R&D Tax Credits Roundtable
Manufacturing NI recently held a roundtable discussion event in partnership with Jumpstart, the UK’s leading R&D tax specialist, at Keylite Roof Windows in Cookstown. The purpose of the event was to help local businesses gain a better understanding of the R&D tax credit scheme and the wealth of opportunities that it offers to manufacturing firms across Northern Ireland with the potential of making significant tax savings.
Alongside representatives from its parent company, the Keystone Group, Keylite were joined by a number of other local manufacturers, including Steelweld Fabrications, Hutchinson’s Feeds and BA Components.
Kicking off the event, Manufacturing NI Chief Executive Stephen Kelly posed the question: “Northern Ireland’s spend on R&D is currently very healthy at around £250m each year, but do companies here really have full understanding of the R&D tax credit scheme and how it works?”
R&D tax relief, available to SMEs as well as large companies, can be claimed if an R&D project seeks to generate knowledge or improve capability in a field of science or technology through the resolution of scientific or technological uncertainty.
Representatives from Jumpstart were on hand to provide advice to those in attendance. With Northern Ireland only making up around just 1% of all R&D tax relief benefits claimed within the UK, they said it is evident that more can be done to ensure that companies here are not losing out on potentially hundreds of thousands of pounds of tax savings.
“Uptake of the R&D tax relief system should begin with an educational process, so we are really investing in ensuring that companies in Northern Ireland are fully aware of the ins and outs of the fantastic opportunity that the R&D tax credit scheme can offer their businesses,” said Ian Wolfendale, Client Engagement Manager for Jumpstart in Northern Ireland.
“R&D is not just about being in a lab coat and this means that claimants should be looking across their entire business, and not just at one particular project for processes that may entail aspects of R&D.”
Dr Gemma Craig, a native of Co. Londonderry and Technical Analyst at Jumpstart, commented: “Indirect activities such as having other members of staff supporting an R&D manager may be eligible for tax relief, for example – even if those supporting that manager are not R&D specialists themselves. Not every company or every accountant knows this, however, which means that many companies are under claiming significantly.”
Having completed her doctorate in cancer research, Dr Craig is just one example of Jumpstart’s team of Technical Analysts with specialist expertise and industry experience. Yet having gained a thoroughly in-depth understanding of the tax relief guidelines set by HMRC, her expert knowledge extends to a wide range of sectors every day, including manufacturing.
“Jumpstart is able to add value to the service that an accountant typically provides by offering the technical and scientific knowledge they simply would not be expected to provide,” she continued.
“This means that we can provide a much more detailed report to HMRC on the level of R&D activity taking place within a company and, since we have the expertise in-house to truly understand the intricacies of that R&D activity, we guarantee a much higher degree of accuracy – therefore reducing the risk of over claiming or under claiming for the company.
“Since we work very closely alongside HMRC on a daily basis we have an unrivalled, in-depth understanding of its guidelines, which are extremely complex and could be open to misinterpretation. This means that we can provide a level of service that other organisations simply cannot.”
Mr Wolfendale explained that HMRC wants to see R&D being used to create an improvement in its offering. “Companies must be able to demonstrate an improvement to a product or service, such as making something faster, lighter, stronger; as well as highlighting the knowledge gained as a result of the investment in R&D and what challenges were encountered along the way,” he said. “Even if the R&D in which your company invests doesn’t have the outcome you hoped for, it could still qualify for R&D tax relief.”
Having had some experience of claiming for R&D tax relief in the past to varying degrees, some of the group had encountered issues along the way such as completion of cumbersome documents for their accountants; having their claims queried by HMRC due to inadequate reporting; or not receiving the correct claim amount due to a lack of technical knowledge provided in their claims.
Mr Wolfendale explained that members of the Jumpstart team such as Dr Craig will have undertaken a minimum of six months training to fully comprehend over 600 pages of intricate HMRC guidelines.
Commenting on just how meticulous Jumpstart’s approach is, Dr Craig said: “Jumpstart delves into all of the complicated nuances that we have come to understand well over the years, such as the massive importance of wording a report very carefully and very precisely. As well as preparing an in-depth report for every claim, we can also work alongside our clients’ accountant for the completion of the CT600.”
With the group all claiming to find the roundtable to be highly informative, Mr Kelly commented: “It is very clear that Jumpstart’s approach is unique and could add real value to the processes that some manufacturers in Northern Ireland are already implementing with their accountants to claim R&D tax relief.
“The real concern though is that literally hundreds of accountants are missing out on the opportunity to claim back thousands of pounds which can be claimed back through the R&D tax relief scheme and then re-invested to drive further growth in their business.”
Mr Wolfendale concluded: “We would like to hear from any manufacturers in Northern Ireland who believe that they are investing in R&D in their business and are keen to work with Jumpstart to investigate opportunities to claim back potentially very significant amounts of money for their business.”
Manufacturing NI members are entitled to an enhanced deal with Jumpstart. For more details, see http://www.manufacturingni.org/rd_tax_credits