R&D Incentives
What are R&D Incentives?
R&D Incentives, commonly known as R&D Tax Credits, is a well-established government incentive created to reward UK companies for investing in innovation. The incentive creates a valuable source of additional cash flow for businesses and can be used as a strategic tool to accelerate innovation and growth.
Any limited company can apply, however you must meet the eligibility criteria.
Find out more below.
How does R&D Tax Relief work?
Any company that invests in the development of new products, processes, or services, or the enhancement of existing ones can be eligible for R&D tax relief. If your business has spent money on innovation, R&D tax relief enables you to receive either a cash payment or a Corporation Tax reduction.
Companies in both profit and loss positions can claim, meaning you don’t need to be paying Corporation Tax to receive a benefit. R&D tax relief operates retrospectively, meaning you can claim for your previous accounting periods, and then on an ongoing basis into the future.
Marine Innovation & R&D
The cleantech industry has become one of the most innovative industrial sectors in the economy. With the global cleantech market investing over £500b in R&D per year, this sector is expected to increase exponentially with increasing investment in new technologies to meet the challenges associated with decarbonisation and net-zero.
A unique challenge faced by the cleantech sector is that the technologies required to create solutions simply do not exist, meaning cleantech companies are often forced to create new bespoke solutions not previously available in other sectors, and therefore adding to the degree of technological uncertainty.
What qualifies as R&D?
The application of R&D in the marine sector is wide-reaching and HMRC’s eligibility criteria are purposefully broad. We’re aware of how tricky it is to understand HMRC legislation, so here is a concise breakdown.
Key indicators of R&D:
Developing new or improved products, processes, or services
Modifying an existing product, process, or service to make it better
Attempting to resolve technological or scientific uncertainties
Trying to solve a problem where no solution is evident
Uncertainty around whether your project is technologically possible
R&D begins when work to resolve a technological uncertainty starts, and ends when these uncertainties have been resolved.
From offshore wind and renewables, the development of bio-composites and advanced materials, clean shipping, high-performance leisure craft, electric drives and propulsion, and the development of alternate fuels, cleantech companies are in prime position to receive government innovation funding support.