#Research and Development Tax Credits

[hms-software-timecontrol]

It’s the end of the year and time to be sure your R&D reporting is up to date.

It’s the end of the year and time to be sure your R&D reporting is up to date. TimeControl is ideally suited for R&D Tax Credits regardless of your jurisdiction. Find out more...

With the end of the calendar year in sight, it’s time to review the R&D tax credit reporting that you are shortly going to be asked to deliver. TimeControl has been used for R&D tax credit reporting since it was first created and here at HMS we are well familiar with the process. Many governments in the US, Canada, Australia, UK and Europe have some kind of Research incentive program. It often…

[alexander-clifford]

Understanding R&D Tax Credits: How Far Back Can I Claim?

Don’t run out the clock on your R&D claim, instead, understand how you can form a compliant claim that awards you significant financial benefits.

When it comes to R&D tax credits, timing is crucial. Not only do HMRC set time limits for first time claimants, but each claim must adhere to specific deadlines in accordance with their own accounting period.

When seeking out information on these deadlines, the language can sometimes seem a little complicated however. So instead of spending hours trying to make sense of the government guidelines, we’ve simplified the material to present you with a direct insight into the time limits and deadlines that you need to know.

Understanding R&D Tax Credits

After its introduction in the year 2000, the R&D tax credit incentive has empowered businesses throughout the UK to invest in innovation. Initially the incentive was available only to small and medium sized enterprises (SMEs), but as of 2002 has been opened up to large companies, forming two primary schemes:

SME scheme Available for businesses with fewer than 500 employees and either an annual turnover under €100 million, or a balance sheet under €86 million

RDEC Available to large companies with 500+ employees and SMEs with subcontracted R&D that doesn’t meet specific qualifying criteria under the SME scheme

In order to qualify for R&D tax credits, businesses must ensure that their projects fit HMRC’s definition of research and development. That is to say that qualifying research and development projects are those that aim to achieve an advancement in science or technology by resolving uncertainties that could not be overcome by an expert in the field.

In order to understand more about R&D tax credits and whether your research and development project meets the eligibility criteria, book your call with one of specialist consultants.

Book a quick call back : https://calendly.com/alexanderclifford-marketing/30min

Time Limits for Claiming R&D Tax Credits

Understanding the time limits and deadlines of R&D tax credits is one of the most important aspects of the claims process, and at present there are two that you need to keep in mind when preparing to make a claim.

Firstly, you need to understand the claim notification deadline. As of April 1st 2023, businesses looking to make a claim must notify HMRC of their intention to claim R&D tax credits if:

They have not claimed R&D tax relief in the previous three years.

They are claiming for the first time

Businesses making a claim notification must do this within six months of the end of their accounting period.

Secondly, you have to understand the time limits involved in claiming the tax relief. Aligning with the deadline for a corporate tax return (CT600), the time limit for claiming R&D tax credits is two years from the end of the accounting period during which the research and development project occurred.

Example of the R&D Tax Credits Time Limit

3 Ways to Prepare Your R&D Tax Credit Claim

When looking to make an R&D tax credit claim, there are a few things that you should prepare beforehand in order to maximise the potential financial benefit of your claim. We’ve broken down what you should prepare into these 3 simple steps.

Step One: Identify Your Qualifying Factors

Before making your claim, you must first establish your qualifying activities. These are the actions that you took throughout your project in order to overcome the identified uncertainties, and that adhere to the following criteria:

Activity should aim to advance knowledge or capability

Activity must seek to resolve industry related uncertainties

Activity should be conducted using a systematic approach

Activity should not be easily replicated

Prior to identifying your qualifying activities, you’re required to identify the qualifying expenditure associated with each activity. These costs include:

Direct staff costs (such as PAYE, NIC and pension contributions)

Consumable item costs

Software used directly in R&D

Test stage prototype costs

By identifying the qualifying factors in this order, you may be able to maximise the extent of the financial benefits received from R&D tax credits.

Step Two: Gathering Documentation

Your documentation is what certifies your R&D claim. The documents that you gather should be able to present a timeline of your project, and certify your qualifying expenditure, some of which include:

Project reports

Employee time sheets

R&D related financial reports

Step Three: Organising Your R&D Claim for Each Accounting Period

Many research and development projects span across a variety of years, necessitating more than one claim. For this reason, it is imperative that you organise your project documentation for each accounting period.

By organising your claim for each accounting period, not only will you be able to make the claims process more efficient, but you’ll also be able to prepare for any potential HMRC enquiries.

How Alexander Clifford Can Further Maximise Your Claim

Known for their efficiency and expert insights into HMRC policy, our specialist team is dedicated to ensuring that your claim is compliant and rewarding.

As leading R&D tax credit specialists, the team at Alexander Clifford have compiled and submitted over 2,400 claims on behalf of our clients, resulting in an average financial benefit of over £50,000.

That’s what makes Alexander Clifford your trusted choice for R&D tax credits. https://alexanderclifford.co.uk/

[abrown455]

How To Claim The R&D Tax Credit For Manufacturers

Manufacturers claim the lion’s share of R&D Tax Credits annually – over $7.5B in the most recent year for which data is available.  

This tremendous incentive is a dollar-for-dollar federal Credit that can be claimed yearly and used to offset tax liability. The Credit allows companies to hire new employees, expand their technologies, and finance other business objectives. Some states have their own versions of the Credit, further boosting the possible benefit. For more information kindly visit - https://capstantax.com/how-to-claim-the-rd-tax-credit-for-manufacturers/

[ifindtaxpro]

📱💰 Mobile app developers, maximize your revenue and tax benefits with these key considerations! 💡💼 #MobileApps #TaxTips #AppDevelopers

[batboyblog]

Things the Biden-Harris Administration Did This Week #31

August 9-16 2024

President Biden and Vice-President Harris announced together the successful conclusion of the first negotiations between Medicare and pharmaceutical companies over drug prices. For years Medicare was not allow to directly negotiate princes with drug companies leaving seniors to pay high prices. It has been a Democratic goal for many years to change this. President Biden noted he first introduced a bill to allow these negotiations as a Senator back in 1973. Thanks to Inflation Reduction Act, passed with no Republican support using Vice-President Harris' tie breaking vote, this long time Democratic goal is now a reality. Savings on these first ten drugs are between 38% and 79% and will collectively save seniors $1.8 billion dollars in out of pocket costs. This comes on top of the Biden-Harris Administration already having capped the price of insulin for Medicare's 3.5 million diabetics at $35 a month, as well as the Administration's plan to cap Medicare out of pocket drug costs at $2,000 a year starting January 2025.

President Biden and Vice President Harris have launched a wide ranging all of government effort to crack down on companies wasting customers time with excessive paperwork, hold times, and robots rather than real people. Some of the actions from the "Time is Money" effort include: The FTC and FCC putting forward rules that require companies to make canceling a subscription or service as easy as signing up for it. The Department of Transportation has required automatic refunds for canceled flights. The CFPB is working on rules to require companies to have to allow customers to speak to a real person with just one button click ending endless "doom loops" of recored messages. The CFPB is also working on rules around chatbots, particularly their use from banks. The FTC is working on rules to ban companies from posting fake reviews, suppressing honest negative reviews, or paying for  positive reviews. HHS and the Department of Labor are taking steps to require insurance companies to allow health claims to be submitted online. All these actions come on top of the Biden Administration's efforts to get rid of junk fees.

President Biden and First Lady Jill Biden announced further funding as part of the President's Cancer Moonshot. The Cancer Moonshot was launched by then Vice-President Biden in 2016 in the aftermath of his son Beau Biden's death from brain cancer in late 2015. It was scrapped by Trump as political retaliation against the Obama-Biden Administration. Revived by President Biden in 2022 it has the goal of cutting the number of cancer deaths in half over the next 25 years, saving 4 million lives. Part of the Moonshot is Advanced Research Projects Agency for Health (ARPA-H), grants to help develop cutting edge technology to prevent, detect, and treat cancer. The President and First Lady announced $150 million in ARPA-H grants this week focused on more successful cancer surgeries. With grants to Tulane, Rice, Johns Hopkins, and Dartmouth, among others, they'll help fund imaging and microscope technology that will allow surgeons to more successfully determine if all cancer has been remove, as well as medical imaging focused on preventing damage to healthy tissues during surgeries.

Vice-President Harris announced a 4-year plan to lower housing costs. The Vice-President plans on offering $25,000 to first time home buyers in down-payment support. It's believed this will help support 1 million first time buyers a year. She also called for the building of 3 million more housing units, and a $40 billion innovation fund to spur innovative housing construction. This adds to President Biden's call for a $10,000 tax credit for first time buyers and calls by the President to punish landlords who raise the rent by over 5%.

President Biden Designates the site of the 1908 Springfield Race Riot a National Monument. The two day riot in Illinois capital took place just blocks away from Abraham Lincoln's Springfield home. In August 1908, 17 people die, including a black infant, and 2,000 black refugees were forced to flee the city. As a direct result of the riot, black community leaders and white allies met a few months later in New York and founded the NAACP. The new National Monument will seek to preserve the history and educate the public both on the horrible race riot as well as the foundation of the NAACP. This is the second time President Biden has used his authority to set up a National Monument protecting black history, after setting up the Emmett Till and Mamie Till-Mobley National Monument on Emmett Till's 82nd birthday July 25th 2023.

The Department of The Interior announced $775 million to help cap and clean up orphaned oil and gas wells. The money will help cap wells in 21 states. The Biden-Harris Administration has allocated $4.7 billion to plug orphaned wells, a billion of which has already been distributed. More than 8,200 such wells have been capped since the Bipartisan Infrastructure Law passed in 2022. Orphaned wells leak toxins into communities and are leaking the super greenhouse gas methane. Plugging them will not only improve the health of nearby communities but help fight climate change on a global level.

Vice-President Harris announced plans to ban price-gouging in the food and grocery industries. This would be a first ever federal ban on price gouging and Harris called for clear "rules of the road" on price rises in food, and strong penalties from the FTC for those who break them. This is in line with President Biden's launching of a federal Strike Force on Unfair and Illegal Pricing in March, and Democratic Senator Bob Casey's bill to ban "shrinkflation". In response to this pressure from Democrats on price gouging and after aggressive questions by Senator Casey and Senator Elizabeth Warren, the supermarket giant Kroger proposed dropping prices by a billion dollars

[thetaxrelief]

Research and Development (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.

[reasonsforhope]

Flint, Michigan, has one of the [United States]'s highest rates of child poverty — something that got a lot of attention during the city's lead water crisis a decade ago. And a pediatrician who helped expose that lead problem has now launched a first-of-its-kind move to tackle poverty: giving every new mother $7,500 in cash aid over a year.

A baby's first year is crucial for development. It's also a time of peak poverty.

Flint's new cash transfer program, Rx Kids, starts during pregnancy. The first payment is $1,500 to encourage prenatal care. After delivery, mothers will get $500 a month over the baby's first year.

"What happens in that first year of life can really portend your entire life course trajectory. Your brain literally doubles in size in the first 12 months," says Hanna-Attisha, who's also a public health professor at Michigan State University.

A baby's birth is also a peak time for poverty. Being pregnant can force women to cut back hours or even lose a job. Then comes the double whammy cost of child care.

Research has found that stress from childhood poverty can harm a person's physical and mental health, brain development and performance in school. Infants and toddlers are more likely than older children to be put into foster care, for reasons that advocates say conflate neglect with poverty.

In Flint, where the child poverty rate is more than 50%, Hanna-Attisha says new moms are in a bind. "We just had a baby miss their 4-day-old appointment because mom had to go back to work at four days," she says...

Benefits of Cash Aid

Studies have found such payments reduce financial hardship and food insecurity and improve mental and physical health for both mothers and children.

The U.S. got a short-lived taste of that in 2021. Congress temporarily expanded the child tax credit, boosting payments and also sending them to the poorest families who had been excluded because they didn't make enough to qualify for the credit. Research found that families mostly spent the money on basic needs. The bigger tax credit improved families' finances and briefly cut the country's child poverty rate nearly in half.

"We saw food hardship dropped to the lowest level ever," Shaefer says. "And we saw credit scores actually go to the highest that they'd ever been in at the end of 2021."

Critics worried that the expanded credit would lead people to work less, but there was little evidence of that. Some said they used the extra money for child care so they could go to work.

As cash assistance in Flint ramps up, Shaefer will be tracking not just its impact on financial well-being, but how it affects the roughly 1,200 babies born in the city each year.

"We're going to see if expectant moms route into prenatal care earlier," he says. "Are they able to go more? And then we'll be able to look at birth outcomes," including birth weight and neonatal intensive care unit (NICU) admissions.

Since the pandemic, dozens of cash aid pilots have popped up across the nation. But unlike them, Rx Kids is not limited to lower-income households. It's universal, which means every new mom will get the same amount of money. "You pit people against each other when you draw that line in the sand and say, 'You don't need this, and you do,' " Shaefer says. It can also stigmatize families who get the aid, he says, as happened with traditional welfare...

So far, there's more than $43 million to keep the program going for three years. Funders include foundations, health insurance companies and the state of Michigan, which allocated a small part of its federal cash aid, known as Temporary Assistance for Needy Families.

Money can buy more time for bonding with a baby

Alana Turner can't believe her luck with Flint's new cash benefits. "I was just shocked because of the timing of it all," she says.

Turner is due soon with her second child, a girl. She lives with her aunt and her 4-year-old son, Ace. After he was born, her car broke down and she was seriously cash-strapped, negotiating over bill payments. This time, she hopes she won't have to choose between basic needs.

"Like, I shouldn't have to think about choosing between are the lights going to be on or am I going to make sure the car brakes are good," she says...

But since she'll be getting an unexpected $7,500 over the next year, Turner has a new goal. With her first child, she was back on the job in less than six weeks. Now, she hopes she'll be able to slow down and spend more time with her daughter.

"I don't want to sacrifice the time with my newborn like I had to for my son, if I don't have to," she says."

-via NPR, March 12, 2024

[simply-ivanka]

How the Biden-Harris Economy Left Most Americans Behind

A government spending boom fueled inflation that has crushed real average incomes.

By The Editorial Board -- Wall Street Journal

Kamala Harris plans to roll out her economic priorities in a speech on Friday, though leaks to the press say not to expect much different than the last four years. That’s bad news because the Biden-Harris economic record has left most Americans worse off than they were four years ago. The evidence is indisputable.

President Biden claims that he inherited the worst economy since the Great Depression, but this isn’t close to true. The economy in January 2021 was fast recovering from the pandemic as vaccines rolled out and state lockdowns eased. GDP grew 34.8% in the third quarter of 2020, 4.2% in the fourth, and 5.2% in the first quarter of 2021. By the end of that first quarter, real GDP had returned to its pre-pandemic high. All Mr. Biden had to do was let the recovery unfold.

Instead, Democrats in March 2021 used Covid relief as a pretext to pass $1.9 trillion in new spending. This was more than double Barack Obama’s 2009 spending bonanza. State and local governments were the biggest beneficiaries, receiving $350 billion in direct aid, $122 billion for K-12 schools and $30 billion for mass transit. Insolvent union pension funds received a $86 billion rescue.

The rest was mostly transfer payments to individuals, including a five-month extension of enhanced unemployment benefits, a $3,600 fully refundable child tax credit, $1,400 stimulus payments per person, sweetened Affordable Care Act subsidies, an increased earned income tax credit including for folks who didn’t work, housing subsidies and so much more.

The handouts discouraged the unemployed from returning to work and fueled consumer spending, which was already primed to surge owing to pent-up savings from the Covid lockdowns and spending under Donald Trump. By mid-2021, Americans had $2.3 trillion in “excess savings” relative to pre-pandemic levels—equivalent to roughly 12.5% of disposable income.

So much money chasing too few goods fueled inflation, which was supercharged by the Federal Reserve’s accommodative policy. Historically low mortgage rates drove up housing prices. The White House blamed “corporate greed” for inflation that peaked at 9.1% in June 2022, even as the spending party in Washington continued.

In November 2021, Congress passed a $1 trillion bill full of green pork and more money for states. Then came the $280 billion Chips Act and Mr. Biden’s Green New Deal—aka the Inflation Reduction Act—which Goldman Sachs estimates will cost $1.2 trillion over a decade. Such heaps of government spending have distorted private investment.

While investment in new factories has grown, spending on research and development and new equipment has slowed. Overall private fixed investment has grown at roughly half the rate under Mr. Biden as it did under Mr. Trump. Manufacturing output remains lower than before the pandemic.

Magnifying market misallocations, the Administration conditioned subsidies on businesses advancing its priorities such as paying union-level wages and providing child care to workers. It also boosted food stamps, expanded eligibility for ObamaCare subsidies and waved away hundreds of billions of dollars in student debt. The result: $5.8 trillion in deficits during Mr. Biden’s first three years—about twice as much as during Donald Trump’s—and the highest inflation in four decades.

Prices have increased by nearly 20% since January 2021, compared to 7.8% during the Trump Presidency. Inflation-adjusted average weekly earnings are down 3.9% since Mr. Biden entered office, compared to an increase of 2.6% during Mr. Trump’s first three years. (Real wages increased much more in 2020, but partly owing to statistical artifacts.)

Higher interest rates are finally bringing inflation under control, which is allowing real wages to rise again. But the Federal Reserve had to raise rates higher than it otherwise would have to offset the monetary and fiscal gusher. The higher rates have pushed up mortgage costs for new home buyers.

Three years of inflation and higher interest rates are stretching American pocketbooks, especially for lower income workers. Seriously delinquent auto loans and credit cards are higher than any time since the immediate aftermath of the 2008-09 recession.

Ms. Harris boasts that the economy has added nearly 16 million jobs during the Biden Presidency—compared to about 6.4 million during Mr. Trump’s first three years. But most of these “new” jobs are backfilling losses from the pandemic lockdowns. The U.S. has fewer jobs than it was on track to add before the pandemic.

What’s more, all the Biden-Harris spending has yielded little economic bang for the taxpayer buck. Washington has borrowed more than $400,000 for every additional job added under Mr. Biden compared to Mr. Trump’s first three years. Most new jobs are concentrated in government, healthcare and social assistance—60% of new jobs in the last year.

Administrative agencies are also creating uncertainty by blitzing businesses with costly regulations—for instance, expanding overtime pay, restricting independent contractors, setting stricter emissions limits on power plants and factories, micro-managing broadband buildout and requiring CO2 emissions calculations in environmental reviews.

The economy is still expanding, but business investment has slowed. And although the affluent are doing relatively well because of buoyant asset prices, surveys show that most Americans feel financially insecure. Thus another political paradox of the Biden-Harris years: Socioeconomic disparities have increased.

Ms. Harris is promising the same economic policies with a shinier countenance. Don’t expect better results.

[lady-raziel]

How Project 2025 could radically reshape higher ed (insidehighered.com)

I know you've heard a lot of things about Project 2025 at this point and most of them are scary, but I think it's things like this that indicate that even the stuff in that plan that seems boring is very scary too. Here's a bit of an analysis on some of the plans regarding higher education.

Basically, they want to make it much, much harder to get student loans, and to make the loans you can get much harder to pay off. For so many people, the only way they'll ever be able to get a higher education is with the help of federal student loans. Without that assistance, and for degrees that don't guarantee a high-paying career quickly (such as art, history, literature-- so many subjects, most of them "soft-sciences") because having a high-income would be necessary to keep up with payments (as income-driven repayment plans will be eliminated)...a lot of people will not go to college. Particularly people from disadvantaged backgrounds.

So it would be that most high-school grads can't afford school, and the ones that take on loans have to prioritize careers that by nature aren't the ones taking on learning from history, culture, or political thought because it's hard to make money and advance quickly career-wise with those. It would gatekeep the "soft-science" subjects that tend to spur criticisms of society, history, and power to those who could afford to pay full-price-- who are also likely to be privileged and in the ruling class and thus the least likely to criticize the existing culture. And by gatekeeping that knowledge and its credentials, they could discredit anyone who hasn't studied the subject by saying that they are uninformed or uneducated and thus shouldn't be taken seriously. They would be in full control of the research being done and the types of papers being written. The end result is crippling the ability to even have academic discourse or research to refute their other policy goals.

Furthermore, the elimination of many repayment plans that already exist serves to punish the people who have already gotten degrees-- if you don't already have a stable job, trying to keep up with higher payments while your taxes go up (increasing tax rate for people making under $168k to 15% of income and eliminating pretty much every deduction, credit, and exclusion) and still affording the necessities (made much harder when Medicaid, SNAP, other social safety nets are cut) will be very challenging. And if you DO have a stable job and are educated on subjects that allow you to criticize the movement-- they can attack you and discredit you and make you lose that job if you publicly disagree. The way Project 2025 suggests restructuring the federal workforce is an example-- even if you're an expert, if you work in a federal agency and don't comply, you're gone.

The long-term purpose of all this is clear-- control the knowledge, control the history, prevent people from developing any skills to oppose you through research or academic theory, prevent people from going to institutions that can get them to question society and power. It is much harder to organize and develop ideas to oppose the people in power if you never get any chance to learn how or what others have done before you.

When the obstacles to getting educated become so great, so challenging, how many people will try? Why risk it, when you have more certainty working a blue-collar job instead? Why push young women to go to school when, if they take out loans, may not be able to maintain the payments if they get married and leave the workforce to have children-- or if they get pregnant (and will not be able to access birth control or an abortion) unexpectedly and also have to leave the workforce? With social safety net programs gutted and women forced to give birth upon becoming pregnant, and no early childhood education program to provide relief causing women to have to stay home, there would be no way to repay student loans for women who leave the workforce in this scenario. Being a woman is too much of a risk for higher ed in this world--how many will take that risk?

And none of this even scratches what Project 2025 wants to do to the colleges and universities themselves and how teaching certain subjects could cause them to lose funding. Again--how many will take that risk? Going bankrupt, or discussing critical race theory?

The real, long-lasting threat of this agenda, even beyond the immediate terrible effects on the LGBTQ+ community and disadvantaged communities, is to make life unlivable for those that disagree or exist in a way the right-wing doesn't like. It uses the whole of systems of power--governmental, financial, social, societal-- to work together in concert to make the only way to live be their way. It's not just one policy--it's all of them working together to crush people and make sure even those in a privileged position who could disagree...won't.

You know the call to action is to vote. But I'd also spend some time educating yourself on some of the more boring-sounding objectives in Project 2025. Don't feel pressured to read the whole thing yourself, because it's very long and dense as it IS actually written by smart and competent people who are conservative academics and former Trump staffers. That's why it's a problem-- these people are smart enough and know enough to make this plan work. But there are a lot of articles from reputable sources out there breaking down even the dullest-sounding parts of this plan-- please spend some time understanding the extent and educate those around you.

[acronymking4tdp]

Many in the US are not aware, but the original plan for Medicare and Medicaid in 1965 covered drugs administered in health care settings, but it was not until 2003, after almost 40 years of medical innovation had significantly changed our management of chronic illnesses, that Congress included those drugs someone takes at home. At the time, to get Republicans behind the bill, Congress explicitly prohibited the government from negotiating the prices of medications. (Emphasis mine ... because I think it is important that people know that the Party that prides itself on protecting the tax payers' money and trusting the power of the markets refused to help everyday citizens until they had codified protecting the profits of big pharma. Side note: At that time the pharmaceutical industry enjoyed average profits of 18% - among the best in the markets. Bear in mind that through grants to universities, as well as government labs, the US tax payers fund much of the basic research that big pharma then uses to develop their products.) Flash forward to 2022, when President Joe Biden signed the Inflation Reduction Act into law. Among other things, that law permitted Medicare to negotiate drug prices, a provision about 83% of voters supported and a big benefit for seniors and the poor -- two populations that live on limited and often fixed incomes.

Republicans opposed the measure, with not a single Republican voting for the Inflation Reduction Act itself, and Vice President Kamala Harris cast the tie-breaking vote that gave the act the votes to go to the president’s desk. (Emphasis mine. Side note: since many of their constituents approve of the effects of this act, many Republicans now claim credit for the Inflation Reduction Act, even though as a monolithic group they tried to kill it, and have stated that they will try again if they can get Trump into the White House -- because a Democrat would veto any effort to repeal it.) Once more for the people in the back: Republicans have vowed that if Trump is elected, they will try to repeal the Inflation Reduction Act before the negotiated drug prices can go into effect (in 2026.) The GOP have shown us who they are, who their friends are, and where their loyalties lie. It's up to voters to show the GOP how they feel about that. (If you appreciate this information, please reblog to amplify the facts.) Much of this post is taken from Heather Cox Richardson's "Letters from an American", posted 16 AUG 24.

[alexander-clifford]

4 Steps to Compiling an HMRC Compliant R&D Tax Credit Claim

Understand every step in the claims process, why an R&D tax credit consultant could help maximise your claim, how to identify a credible specialist and more!

There’s far more to an R&D tax credit claim than simply telling the tax authorities about your expenditure. In fact, forming a credible claim is a process that requires you to be organised, while maintaining a superb understanding of HMRC rules and regulations surrounding R&D tax credits.

In order to ensure that the claims process is as straightforward as possible, we deciphered the key steps that will help you to form the basis of your claim. With information on eligible projects and activities, qualifying costs, documentation and identifying reputable consultants, this is the ultimate step-by-step to building your R&D claim.

What is the R&D Tax Credit Claims Process?

Initially the R&D tax credit claims process describes the process that allows businesses to claim R&D tax credits in the UK. This process includes the following steps:

Identifying eligible projects and activities

Identifying and calculating the qualifying expenditure

Compiling the relevant documents

Submitting the claim in accordance with HMRC’s strict guidelines

It is important while progressing through the claims process, that you ensure that every aspect of the claim is in accordance with HMRC’s policy and guidelines. For those looking to get expert advice in regards to this, it’s helpful to build a claim with a credible R&D tax credit specialist such as those at Alexander Clifford.

Book Your FREE, No-Win-No-Fee Consultation Now! https://calendly.com/alexanderclifford-marketing/30min

Step One: Identifying Eligible R&D Projects and Activities

When identifying eligible R&D projects and activities, we must all take into consideration the specific definition that HMRC has of research and development.

In their eyes, research and development is a project that seeks to overcome an industry uncertainty using science or technology. Furthermore, this uncertainty should not be easily solved by an expert or individual in the industry.

By aligning with this definition, research and development projects should in turn aim to make an advancement by producing one of the following:

A product

A service

A material

A process

A device

Throughout each project, there will be a healthy mix of qualifying and non qualifying activities. Qualifying activities should aim to advance knowledge and capability, while seeking to resolve the industry uncertainty. To highlight the difference between qualifying and non qualifying activities, the following table provides a few examples.

When compiling documentation, it’s important to include both the qualifying and non qualifying activities in your technical report. Not only does this help to establish the qualifying projects, but it helps to provide a project narrative. Although all activities should be included in your claim, you can only claim R&D tax credits for qualifying activities.

Step Two: Identifying and Calculating Qualifying R&D Expenditure

After identifying your qualifying activities, it’s necessary to understand the qualifying R&D costs. In this area, HMRC are quite generous as they allow businesses to claim:

Direct and externally provided staff costs

Subcontracted R&D

Consumable items

Software used in R&D

Clinical trial volunteer costs (for pharmaceutical and medical innovation)

Test stage prototypes

Collaborative R&D

Once you’ve identified the qualifying costs, calculating your total expenditure is vital. With this final number, you are able to determine the overall worth of your claim with an R&D tax credit calculator.

Step Three: Compiling Relevant R&D Documentation

Possibly the biggest part of an R&D tax credit claim, the documentation should outline the key aims of your research and development project, present the finances involved, and tell a technical narrative of your business’s approach to overcoming uncertainty.

Some of the relevant R&D documentation may include:

Project description

Financial records

Technical reports

Supporting documentation

Understanding the documentation requirements is one of the most integral parts of compiling a claim, as incorrect documentation can lead to an enquiry, thus subjecting your future claims to enhanced scrutiny. This is why we suggest that you compile your claim with someone that has an in depth insight into the HMRC policies in relation to R&D tax credits.

Bonus Step: Consulting With an R&D Tax Credit Specialist

In order to develop an R&D tax credit claim that adheres to guidelines, HMRC actually recommend that you work alongside an R&D tax credit specialist consultant.

A great R&D tax credit expert will make it their responsibility to identify your qualifying activities and expenditure, and then work with you to compile and submit the documentation that supports your claim. Additionally, they will typically communicate with HMRC on your behalf, while making sure to keep you informed of the developments in your claim.

While there are a range of great R&D tax credit specialists out there, there are unfortunately, some who abuse that title. To ensure that a consultant is both credible and reputable, we recommend that you do the following:

Check qualifications and experience

Request references or case studies

Verify industry expertise

Review fees and payment structure

By doing this research, you’re able to gain an insight into the way that a consultant works. Furthermore, we recommend that you check their reviews in order to determine the overall satisfaction of previous clients.

FAQ’s

The area of R&D tax credits is often rather complex. From determining the qualifying factors to understanding the accounting treatment, there’s a lot of confusing information out there.

But we’re in the business of simplifying the process, so we wanted to take a moment to ask some of the most common questions regarding R&D tax credits.

Is There a Limit on R&D TaxCredits?

In short, yes. The limitations of R&D tax credits are determined by the size of the business, and therefore the scheme under which you’re claiming. The limitations are as follows:

SME scheme: the amount of R&D tax credit can be capped based on the company’s PAYE and NIC liabilities, particularly for loss-making companies. There’s also an overall cap of £20,000 plus three times the company’s total PAYE and NIC liabilities

RDEC scheme: large companies, or SMEs claiming under the RDEC scheme, the credit is calculated at 20% of qualifying R&D expenditure (as of April 2023), which is then subject to corporation tax

The merged scheme: includes a cap on the amount of qualifying R&D expenditure that can be claimed. For SMEs, this includes a PAYE and NIC cap similar to the previous SME scheme, with adjustments to align more closely with the RDEC scheme rules

How Far Back Can I Claim R&D?

You can claim R&D tax credits for research and development that has taken place over the past two years. So if you’re claiming at the time this is published (September 2024), then you can claim for research and development between September 2022 — September 2024.

What Happens to Unused R&D Tax Credits?

Similar to limits on R&D tax credits, what happens with unused credits is dependent on the size of the business and the scheme under which the claim was filed. The following shows what may happen to your unused R&D tax credits:

SME scheme If a company is loss making and cannot use the R&D tax credits to offset its tax liability, it can choose to surrender the loss in exchange for a cash credit from HMRC, however if the company does not opt for a cash credit, it can carry forward the unused R&D tax credits to offset future profits or carry them back to offset profits from the previous year

RDEC scheme If a large company under the RDEC scheme has unused R&D tax credits, they can be used to offset the company’s current or future tax liabilities. If there is no immediate tax liability, the credit can be carried forward to offset future taxes, however, in some cases, RDEC credits can be paid out as a cash sum, especially for loss making companies, though this often occurs after other taxes or liabilities have been offset

The merged scheme Loss making companies under the merged scheme have the ability to surrender their unused R&D tax credits in exchange for a cash payment from HMRC, or carry the payment forward to offset future profits For companies that are currently profit making but have more R&D tax credits than they need to offset their tax liability, the excess credits can be carried forward to reduce future tax liabilities Under the RDEC part of the merged scheme, any unused credits that exceed the current tax liability may not immediately result in a cash payment — instead, these credits can be carried forward to offset future tax liabilities, similar to the existing RDEC rules

How Alexander Clifford Can Help

Producing an R&D tax credit claim can be time consuming — especially when you’re trying to understand the strict guidelines set out by HMRC.

As leading R&D tax credit consultants, our specialists draw upon expert knowledge in order to help clients to form their R&D tax credit claims. With over 2,400 successfully submitted claims and an enquiry rate of less than 1%, our specialists have a proven track record of producing high quality claims that adhere to HMRC guidelines.

For more details visit the original post here https://alexanderclifford.co.uk/blog/4-steps-hmrc-rd-tax-credit-claims-process/

[abrown455]

Maximizing Innovation with the Federal R&D Tax Credit

The Federal Research and Development (R&D) Tax Credit offers a significant opportunity for companies to fuel their research endeavors while reducing their tax burden. This credit, often overlooked or misunderstood, provides a substantial incentive for businesses across various industries to invest in innovation. 

[oddygaul]

Warhammer 40,000: Space Marine 2

So did y’all know this game is developed by a Russian team based out of St. Petersburg, meaning part of the money you buy it with will be going straight toward bombing Ukrainians every day?

As a big 40k lore guy and character action fan, I’ve been incredibly excited for this game to drop. Just this weekend, a friend and I were discussing it, and it came up how interesting it is that this 13-year late sequel is developed by a totally different team than the original. While I’m familiar with Relic, the developer of 2011’s Space Marine, I’d never heard of Saber Interactive – so I decided to give them a cursory look before buying the game.

And unfortunately, despite some seeming attempts at a smokescreen, I’m pretty sure this team is fully operating out of russia, meaning a significant amount of any purchase is going straight to the russian war machine.

So, Saber unambiguously was founded by 3 russians in St. Petersburg in 2001. Starting in 2016, they’ve opened some subsidiary studios outside of russia; the St. Petersburg studio, though, has always remained the largest of their teams. They were then acquired by Embracer Group in 2020. However, earlier this year Embracer fully divested in Saber, due partly to Embracer's financial woes, and due partly to a desire to cut ties with russian businesses. Saber was sold to a company called Beacon Interactive, and both Beacon and Saber are now listed as being headquartered in Florida. Ostensibly, this makes it sound like neither Embracer nor Saber are operating in russia anymore, and anyone can play their games worry-free.

However, Beacon is a company that was established in 2024 by Matthew Karch (one of Saber’s founders), so Saber was essentially sold back to its original russian owners. The headlines all proudly proclaim that Embracer has ceased business operations in russia by divesting in Saber. The unspoken, quiet implication of these articles, though, knowing what we know about Beacon, is that Saber itself never left russia, and seemingly is continuing to unapologetically contribute to the war economy with no intention of leaving.

When researching this, I came across some claims that Saber opened a new location in Armenia and moved all their russian and Belarusian devs out-of-country, so as to not financially support the war. While it is true that Saber opened a new studio in Yerevan, Armenia in 2023, I could not find any source or press release backing up any of the claims about the devs having moved, or about the St. Petersburg office closing – and in fact, the receipts pretty damningly seem to show otherwise.

While their English language website doesn’t specify any of their office locations and innocently describes the company as ‘a worldwide publisher and developer consisting of 13 studios in the Americas and Europe’, their russian website’s About Us section proudly lists the street address of their St. Petersburg office, and notes that as of 2022, over 700 people work there.

Their LinkedIn page corroborates this, with their ‘People’ section showing over 900 employees currently located in russia, with just over 100 in Armenia:

While this certainly shines light on Saber’s makeup, there would still be the question of which team made Space Marine 2; fortunately, we have the credits to inform us. The credits start off with about 9 full minutes of russians before you come across the section listing the Armenian team, which consists of 8 people:

So, point is: while I can’t claim to know the exact makeup and tax situation of Saber, it is clear that the company is still largely operating out of russia, with its American headquarters quite possibly just a front to avoid direct sanctions. As it is currently estimated that nearly 50% of russia’s current government spending is going towards their imperialist invasion of Ukraine, no matter how you slice it, this means any purchase of Space Marine 2 is contributing to the russian war economy, and the ongoing murder and cultural erasure of the Ukrainian people. (If you search a bit, you can also find some screenshots of current Saber devs straight-up tweeting their support for the war, but I’m not getting that in-the-weeds here) I was initially shocked at how little I see this being discussed - there’s just about no major reporting on Saber's location, and seemingly no online discourse about it, at least in the English-speaking spaces I frequent. But I get why: it seems to be a very intentional move on Saber’s part to not mention their studio’s affiliation. Looking at misdirection like them unabashedly sharing the address of their St. Petersburg office on the russian site while conveniently avoiding the topic in the English version, it seems pretty clear to me that they’re attempting to hide this fact from Western buyers, and it seems to be working pretty damn well. So whoever ends up reading this: please do not buy this game. I know Ukraine’s plight has fallen out of the public consciousness, but the war is still ongoing, and people are still dying every day. Every morning still brings brings news of another family lost to a russian strike on civilians, of another hospital being bombed, of a new ‘largest strike ever’.

russia’s strategy since the beginning of the war has been to outlast Western support for Ukraine: their idea is that all they have to do is fight a war of attrition until our news cycles have turned over so many times we forget what’s going on. And sure, a lot of these decisions for supporting Ukraine are made on a governmental level – but as an individual, you have a choice not to buy russian goods. Every purchase you make from a russian company, whether it be games, music, or ad revenue on a stream, goes towards taxes, goes towards keeping the russian wartime economy afloat, while they devote all of their production towards their genocidal aims. You don’t have to buy these things – you have a choice not to.

Look, believe me, I was fucking stoked for this game. I own damn near every Dan Abnett book, and the army I played back in the day was Tyranids - I was so thrilled they were finally getting a big-budget appearance, and I’ve been looking forward to Space Marine 2 for months.

But russians bomb my partner’s family & friends every day, and the idea of intentionally paying even one cent towards the glide bombs, cruise missiles and drones that have been killing Ukrainians indiscriminately for over two years is unacceptable to me.

[phantomrose96]

Hey! This question might be a little out of the left field for your blog, but I was wondering what getting into development after college was like for you? One thing I really admire is that— at least from an on looker's point of view —despite the work you do postgrad you've still got a lot of room for writing and interests. I was wondering just how that progression went? Maybe it wasn't progression at all but rather an extremely calculated 52-step misstep into becoming what might be able to be recognized as an adult? Maybe being an adult is about believing you're one first, and actually being one second? Suspension of belief but for emotional maturity? Just looking for a few pointers during my undergrad! :)

djfnkjdf, okay so! tackling things in order

For balancing job and life stuff and interests - it's not like I had any kind of complicated formula. I've landed at a company with a pretty good company culture around work-life balance. Software seems to have a pretty wide spectrum of like, "we expect all waking hours devoted to the company goal" all the way to like "hey everyone jsyk I'm gonna be off at 3pm to take my daughter to her dentist appointment see you later". I did undergrad with a very "all hours dedicated to my course work" mindset and, while the success was nice, the burn out was real. Ending up at a company with a good walk-the-walk approach to work-life balance has been very nice for healing from that, lol. It's a good thing to keep in mind (if you're in a similar field--which maybe you are, since you're math-adjacent) when job-hunting. like sure some people would maybe love to take up a grindset job for a year or two. But if you're looking into something you think you could settle in to long-term, ask around and do some research into the company culture.

As for the whole being an adult thing, I think the best way I've heard it phrased is that adulthood is just building up a ton of "oh, I've done this before" experience. There's a lot of rocky firsts. (This is a random list, which not everyone does, but just examples) things like getting an apartment for yourself for the first time, or setting up electricity in your name for the first time, or setting up internet for the first time, or doing your taxes for the first time, or paying your rent for the first time. And they're all scary things to figure out for the first time! Then over time--at whatever age or milestone you hit these points--they become "oh I've done this before."

If you have adults in your life who can help walk you through this--either parents, family, older friends, that older coworker you get along with--I recommend asking for help and advice. Because those people are "I've done this before" adults who can help you figure it out for the first time when it's new and scary to you. And then once you've done it, and gotten used to it, it won't be new and scary anymore. It'll be a thing you just know how to do now.

I have now set up internet in my name before, and it's become less scary because I now know how to do it. Electricity, gas too. I know how to do my taxes, because I've done them before (and I definitely leaned on advice from my dad the first year I had to do them). I know how to hire movers, because I've done that before. I know how to pay rent. I know how to get a credit card. I know how to order a checkbook, and renew a passport, and how to wire money. I know how to set up online payments. I know how to ride the public transit. I know all that because they were--at one point--scary first-time "adult" things which I had to research, and maybe ask for advice on from adults in my life or the internet, but now I've done them before, and now I know how to do them again, and they aren't so scary.

(Also, for a lot of these things, really, ask!!! For a lot of adult things, there are helplines or offices staffed with people who are happy to help people who are politely looking for information. [Sure okay maybe sometimes you'll encounter someone who's unhappy to help, or doesn't have the info you need] but I've had a lot of success going to places or calling numbers and just being like "hey, sorry, I have some questions about how this works. I'd really appreciate some help!" Just being respectful and courteous of people's time and attention has gotten me a lot of help from city-hall workers, internet service providers, electric companies, rental companies, mortgage brokers, and so many others--people whose job it is to answer questions and give information.)

Hell, I've had a scary couple of months recently feeling out of my depth and inexperienced because (since October) I put an offer on a condo, got a mortgage, closed on the condo, and moved into it. It was a lot of scary firsts. I leaned a lot on older coworkers/relatives/friends for advice (and made sure to show my appreciation for their support--I think that's another part of the process--the gratitude.) It really was not something I could do entirely on my own. But I know a lot more now. I've had a lot more experiences around it. It's now something I "know how to do", and could conceivably do again (just hopefully not for a long time, lol).

Anyway this is getting long but the point is adulthood is not something that happens all at once. It's a steady easing into life experiences and a culmination of "I've done this before" that makes the pieces of adult life less scary over time. Ask for help. Learn. You'll be okay. You'll get there.

Then finally as for MATH--the answer is because math fucks and goes hard as my degree was built on my own blood sweat and tears with multivariate math courses and I saw the opportunity to remember my math roots from high school and make it everyone else's problem in ABoT so I did.

[thetaxrelief]

Research and Development (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.

[ingek73]

Extremist or mainstream: how do Tim Walz’s policies match up globally?

Ed PilkingtonFri 16 Aug 2024 12.00 CEST

Within hours of Minnesota’s governor, Tim Walz, being chosen by Kamala Harris to be her Democratic presidential running mate, Donald Trump and team began attacking him as a “dangerously liberal extremist”.

Trump surrogates seized on Walz’s record of expanding voting rights for former felons, combatting the climate crisis, and other measures as proof that Harris-Walz would be the “most radical ticket in American history”.

If you step back from the melee, and look at his gubernatorial acts through a global lens, they appear anything but extreme. From the perspective of other industrialised nations, what Trump denounces as leftwing radicalism looks little more than basic public welfare provisions.

Far from being militant and revolutionary, initiatives such as paid family leave, free college tuition and rudimentary gun controls – all championed by Walz in Minnesota – have long been regarded as middle-of-the-road and unremarkable in large swathes of the world. Through this frame, it is not Walz who is the outlier, but his Republican critics.

Here are how some of Walz’s most impactful reforms compare with the rest of the world.

Free school lunches

View image in fullscreenTim Walz gets a huge hug from students at Webster Elementary in Minneapolis after he signed into law a bill that guarantees free school meals on 17 March 2023. Photograph: Star Tribune/Getty Images

‘On fire with excitement’: Tim Walz’s former students react to nominationRead more

Walz’s record: “What a monster! Kids are eating and having full bellies so they can go learn.” That was Walz’s sardonic reply to CNN when he was asked about having introduced free breakfast and lunch for all Minnesota schoolkids. The 2023 measure puts Minnesota among just eight US states that offer school meals at no cost to all children, no matter their family’s income.

Around the world: Several countries provide free lunches for their children nationwide. Sweden, Finland and the three Baltic nations all provide meals at no cost for all schoolchildren irrespective of income, and many more European countries provide targeted or subsidised meals. Even a developing country such as India ensures access to lunch for more than 100 million kids daily.

“The idea of offering free meals to all students during the school day is hardly new – many countries already do so,” said Alexis Bylander at the Food Research and Action Center, a US anti-hunger organisation. “Numerous studies show the benefits, including improving student attendance, behaviour and academic success.”

Combatting the climate crisis

View image in fullscreenPublic works employees run a water pump to prevent flood waters from coming up through the storm drains in Stillwater, Minnesota, in 2023. Photograph: Nicole Neri for The Washington Post via Getty Images

Walz’s record: In February 2023 Walz signed legislation committing Minnesota to having all its electricity produced by wind, solar and other clean energy sources by 2040 – an even more ambitious timeframe than adopted by California, America’s sustainable energy leader. The legislature also passed more than 40 climate initiatives, including expanding charging infrastructure for electric vehicles and introducing a new code for commercial buildings to cut energy use by 80% by 2036.

Around the world: By global standards, Minnesota’s ambitions do not stand out. Some 27 countries have written into law target dates by which they will become net zero – that is, stop loading additional greenhouse gases into the atmosphere. In the developed world, Finland is leading the way, pledging to be net zero by 2035, and to begin absorbing more carbon dioxide than it produces by 2040. In December, almost 200 countries at the Cop28 climate summit in Dubai agreed to call on all countries to transition away from fossil fuels and for global renewable energy to be tripled by 2030.

Child tax credit

View image in fullscreenTim Walz reads a story to a group of kindergarteners in St Paul on 17 January 2023. Photograph: Glen Stubbe/Star Tribune via Getty Images

Walz’s record: Last year the governor signed into law a child tax credit program for low-income Minnesota families. The measure sought to fill the hole left by a federal scheme that expired in 2021 after Congress failed to extend it. The Minnesota plan is the most generous of its type in the US, offering $1,750 per child and reaching more than 400,000 children.

Around the world: The Organisation for Economic Co-operation and Development (OECD), the forum of high-income democracies, reported in 2018 that 34 of the 35 countries with available information provided their people with some form of family benefit including tax credits. The OECD compared the value of family benefits for two-child families, measured as a percentage of average earnings, across 41 countries and found that the US came in at No 40, with only Turkey being less generous in its support.

Basic gun controls

View image in fullscreenTim Walz hands out pumpkin bars to a gun safety advocate before the first day of the legislative session in St Paul in 2023. Photograph: Abbie Parr/AP

Walz’s record: The governor identifies as a proud gun-owner and hunter, and he accepted Harris’s invitation to be her running mate wearing a camo hat. That didn’t stop him in May 2023 enacting a slew of gun safety measures, including requiring all private sales of handguns and semi-automatic rifles to go through an FBI background check that looks for evidence of criminal or mental health risks. The changes also introduced a “red flag law” that allows relatives and other interested parties to intervene when someone is in danger of injuring themselves or others with guns.

Around the world: International comparisons show that Americans own vastly more guns than civilians in other rich countries – 121 guns per 100 Americans, compared with five guns per 100 people in the United Kingdom. The number of gun killings per 100,000 people is also vastly higher: 4.12 in the US, 0.04 in the UK.

Other countries also have much tougher gun controls that make those introduced by Walz look weak by comparison. Canada requires gun buyers to wait 28 days before acquiring a firearm, and imposes mandatory safety training and a ban on military-style rifles that does not exist in the US. The UK also bans some semi-automatic rifles and most handguns. Japan tightly restricts gun ownership, banning most guns other than air guns and a few other special categories and even then requiring owners to submit to annual inspections.

Paid family and medical leave

Walz’s record: House File 2, enacted by the governor last year, gave Minnesotans access to up to 20 weeks in every year of partial wages to cover medical leave after a life-changing diagnosis, mental health leave, or time off to care for a new baby. “Paid family and medical leave is about investing in the people that made our state and economy strong in the first place,” Walz said as he signed the bill.

Around the world: The US is the only OECD member country without a national law giving all workers access to paid leave for new mothers. Thirty-seven out 38 OECD countries offer national paid maternity leave – the only exception being the US. France, which holds the top spot, allows mothers and fathers to take paid leave until their child is three years old.

The US is also one of only six countries with no form of national paid leave covering either family or medical leave in the case of a health concern.

Voting rights for former felons

Walz’s record: The governor signed a bill that restores the vote to more than 50,000 Minnesotans who have been convicted of a felony. The Trump campaign denounced the measure as evidence of Walz’s “dangerously liberal agenda”, which is ironic, given that Trump himself, as a convicted felon, will only be able to vote for himself in November thanks to a similar reform in New York.

Around the world: A report released by Human Rights Watch (HRW) in June concluded that the US was an “outlier nation in that it strips voting rights from millions of citizens solely on the basis of a criminal conviction”. In 2022, more than 4 million people in the US were disenfranchised on those grounds. By contrast, when HRW surveyed 136 countries around the world, it found that the majority never or rarely deny the vote because of a criminal record, while those with restrictions tend to be much less draconian in their approach than US states.