R&D Tax Consultant

Suppose that you have an idea – an idea that is ground-breaking and likely to result in the creation of a multi-million-pound device that is going to benefit all of humanity – but your company doesn’t have the financial resources to be able to push it forward.  That would be a sad state of affairs, and you would want to secure funding however you could.

You do have a number of options that you could pursue, which could vary depending upon how much money you actually needed to develop the product or process.  If the research and development (R&D) costs are likely to be low-ish, you could always try and secure the funds by selling something that you no longer needed in the company, and use the cash that you earn on developing your idea. This is generally a good idea if you only need limited funds and believe that you can develop your idea on a shoe-string budget.  It’s also handy if you don’t need the thing or things that you sell, though bit of a problem if you later find that, actually, you could have used it in your development program.

You could try to find investors who will be willing to lend you the money in return for repayment with profits once you have fully developed and productionised your idea, and are actually making a profit on it.  This is an easier option if, once again, you don’t require a huge amount of funding to get your idea into the marketplace, since you won’t be charged interest – and therefore effectively start paying for your loan - while you are developing the idea and not getting any money in from it.  However, private investors are notoriously difficult to persuade in parting with their money for an unproven idea, and become increasingly so the more obscure it is.

You could go to the bank to secure a loan. This is what many smaller companies who don’t have a dedicated R&D budget tend to do.  You will still have to show a range of documents such as a fully-fledged and costed business plan, and detailed project plans with specific goals that can be followed, but banks are usually a bit easier than private investors.  The downside is that, if you get a loan, you will start paying it back – with interest – almost straight away, and that may eat into your development cost, particularly if you haven’t yet capitalised your idea.

The fourth option, and one that is attracting an increasing number of developers, is to make use of the Governments R & D Tax Credits and R & D Tax Credits Loans that have been especially designed to help companies secure the funding that they need.  R & D Tax Credits have been developed especially to supply funding to companies who are developing a new product or solution and who need a bit of extra funding in order to make it a viable and saleable concern, but don’t wat to use any of the other options that may be available to them.

R&D Tax Credits can be offered to a company if they meet certain criteria relating to a project being run within the company. The project must relate to the company’s trade type, though it can be either an existing one, or one that you intend to start up based on the results of the R&D that you are carrying out. In order 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
• could not 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.

However, while these criteria may seem quite easy to fulfil, completing the required paperwork and sending a new claim in can be difficult.  In order to ensure that it is done correctly it is always best to employ an R&D Tax Credits consultant, who will have done this many times before, and will be able to guide you through the whole process.