Author: Roy Quick

We’re very proud to have helped many businesses literally keep the lights on and doors open last year.

At RDS we started with humble beginnings back in 2017, with a one-man office and one client – a specialist asbestos removal company in the North-East. Nearly five years on we have grown our client portfolio to nearly 500 clients and we now employ 14 people.

We’ve come a long way and we were extremely proud towards the end of last year to have passed the milestone of helping SMEs to claim over £23,000,000 back in support at a time where every penny counted.

RDS founder Mark Joyner, 40, from Nottingham, who set up the company with Geoff Liberman, 68, from Hale, talks more about the satisfaction of now seeing the fruits of their labour nearly five years on: “R&D Specialists Limited was incorporated to create awareness and take knowledge and advice to the marketplace regarding the enormous potential of accessing rewards for innovation.

“I can remember when Geoff approached me about R&D in the UK, at the time I had another company and a range of clients that I could see would hugely benefit from the R&D incentive scheme. We immediately decided to set up RDS as we could see the R&D Tax Relief Scheme initiated by HMRC is a huge opportunity for tens of thousands of businesses to increase our economy over the coming years.

“We know many businesses are time poor and overwhelmed by the complexities of the scheme, so our focus from the outset was to handle the whole process seamlessly for them.”

Mark continued: “At RDS we will be celebrating five years of business in 2022, and we are predicted to turn over £2.7 million this financial year. But our proudest achievement is to have helped nearly 500 companies, including names such as Pallex, Bell Lighting and Anthony Grice explore if they are eligible for R&D as well as successful claims of over the £23million mark. For some companies that has been the difference between staying open and profitable throughout the pandemic.

The HMRC tax incentive scheme was set up in 2000 to help stimulate growth and innovation across the UK. The scheme is aimed at UK limited businesses from start-ups to established companies, with the potential to access a tax refund or tax credit for any eligible R&D work conducted.

Mark said: “For many businesses the research and development incentive is overly complex to understand, and they just don’t have the time to commit to investigating it or even starting their own claim.”

“Many also don’t realise the work they’ve undertaken is eligible to claim, or they don’t believe their industry fits the bill. Our ethos was built on demystifying the incentive so that every UK business, understands what qualifies and realises the potential financial rewards.

“Our in-house financial analyst team works very closely with our clients to take them through each step of the process identifying their eligibility. We pride ourselves on being truly transparent, the client sees the financial reports and even receives the claim repayment or credit back to them directly – something we believe sets us apart from some of our competitors.

“We actually work with over 150 accountants across the country supporting their own client portfolio to obtain R&D tax relief,” added Mark.

“More recently we are trying to do all we can to translate the technicalities, so that more people ‘get’ the scheme and look to explore its countless benefits – it’s not just lab coats and microscopes that need apply! From just a matter of hours with our team, we have helped individual companies claim back hundreds of thousands of pounds.”

Every company large or small, could qualify for the HMRC national incentive. For the SME scheme, it just must employ less than 500 people and have a turnover of less than £85m or a balance sheet total of less than £73m then it qualifies, and its eligible R&D costs receive an additional 130% deduction when calculating the taxable profit. 

Mark ended: “One business we met only last week told us on arrival we had only 15 minutes of their time as they were busy and unsure if they were eligible. Within that short meeting and by asking the right questions we uncovered that the business would be able to claim a six-figure sum for a recent R&D project. We are looking to now work with this client for the next five years. All we need is a little time and we do all the hard work this year and beyond.”

Could your business be eligible to claim tens of thousands back in tax relief?

The HMRC Research and Development Tax Scheme was created to encourage business innovation and stimulate the economy, through supporting firms to bring new products and services to market.

Yet, due to time constraints, lack of awareness and doubts around eligibility or the legitimacy of the incentive, there are thousands of companies that are not currently taking part in the scheme.

Here, we attempt to demystify R&D in a bid to reach more companies that could benefit from a cash influx of tens of thousands of pounds.

What is R&D?

Research and development (R&D) tax credits are a valuable government incentive that reward UK businesses for investing in innovation. It is a powerful source of funding for businesses looking to grow and develop new products, services, procedures, and internal systems.

There is a misconception that to qualify for R&D tax relief then a business must employ people in lab coats and be undertaking scientific research, but that is not the case. Any type of research and development could qualify.

Some examples could include:

  • An educational specialist that has developed an innovative game or toy.
  • An agricultural setting that has created a smart sensor to track cattle movements.
  • A construction company that has designed an innovative modular construction method.
  • A fashion/clothing company that has invented a new type of lightweight hiking jacket for extreme temperatures.
  • A fleet management business that has built a bespoke IT system to manage its assets.

What types of business can claim R&D?

Any UK limited business can claim. There are no restrictions on the type or size of business although there are different types of R&D scheme depending on whether you fit HMRC’s guide as being an SME or large company.

For the SME scheme, a company must employ less than 500 people and have a turnover of less than £85m or a balance sheet total of less than £73m. An SME’s eligible R&D costs receive an additional 130% deduction when calculating the taxable profit.

Eligibility is focussed on the research project rather than the type of business. Typically, an R&D claim can be submitted for a business’s current and previous financial year.

Some R&D project criteria to be aware of…

The project must relate to your company’s trade, and you must be able to explain how the project:

  • Looked for an advance in science and technology
  • Had to overcome uncertainty
  • Tried to overcome this uncertainty
  • Could not be easily worked out by a professional in the field

Does the R&D project have to be successful in order to claim?

No, there is no rule that says you need to have a finished product or service brought the market. The research/development phase is enough for you to qualify.

How do I receive the money?

For profitable businesses, the benefit is applied as a reduction in corporation tax. If a claim is historical, the monies will be claimed back as a repayment of overpaid corporation tax.

For companies operating at a loss, the R&D claim will increase the loss arising. This loss can then be set against prior and future profits of the company, or it can be turned in to a cash repayment by using a process HMRC calls ‘surrender’, whereby the business takes a slightly lower benefit percentage for the ‘cash now’.

It sounds too good to be true….

R&D Tax Credits are not PPI for businesses. It is a legitimate Government-backed incentive to encourage innovation and has been operating in the UK since 2000.

That said, there are intricacies, including when claiming for other tax relief incentives, as well as criteria to be met, that can make the process seem overwhelming. That is why employing a R&D specialist such as RDS can help take the headache out of making a claim.

More information on R&D tax relief can be found on the Government’s website here: https://www.gov.uk/guidance/corporation-tax-research-and-development-rd-relief

Mark Joyner, cofounder of RDS said:

“If I were to say to you, I’ll give you £53,000 for your business tomorrow, I’m sure there would be lots of things that, as a business owner, you could do with that money. That figure represents the average amount of a successful claim through the HMRC R&D Tax Incentive. It is not a scam or a way to play the system, yet for many reasons, companies that are eligible are not claiming the money to which they are entitled.”

“A lot of people think it sounds too good to be true, some are time poor and don’t have the time to investigate the scheme properly and some are just unaware that it even exists. At RDS we simplify the process and take a lot of the leg work away from busy accountants or senior teams.”

“Something that sets us apart is that we’re completely transparent and we give our clients full sign off for a claim at various stages of the process. We hand over the final submission to the in-house team so that they know the full figure they’re claiming for, and our costs are recovered only when a successful claim is submitted, approved, and credited. For us, building trust and working in partnership is the most important part of the process.”

To find out more about how RDS could help your business then get in touch with us today!