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As the need for more efficient, intelligent and environmentally-friendly products and services increases, the UK is quickly becoming a thriving hub for innovative businesses across a wide range of industries.
In a rapidly evolving market such as this, research and development should play a pivotal part in every business, including their tax strategy, which is why it’s important to seek tax relief or cash back where appropriate.
R&D is a large part of creating wealth within the corporate world, to rebate and re-invest.
TCS’s astute advisors employ their business and financial knowledge to help their clients navigate and stay within the lines of corporation tax relief while utilising it to its full potential.
R&D Tax Relief currently allows businesses to claim up to 24.7% of their expenditure as a tax refund or reduced tax liability for profitable SMEs and up to 33.3% of their expenditure as a cash repayment for loss-making SMEs.
Introduced in 2000 to increase innovation and create wealth in the UK through R&D.
Enables companies that incur costs in developing new – or improving existing – products, processes or services to receive a cash payment and/or tax deduction.
Works through the Corporation Tax System and has been continually improved since it was introduced.
The scope for qualifying activities and costs is enormous, and our team are experts in identifying them to allow our clients to innovate and grow without restriction.
Land Remediation Relief is a relief from corporation tax only. It provides a deduction of 100%, plus an additional deduction of 50%, for qualifying expenditure incurred by companies in cleaning up land acquired from a third party in a contaminated state.
Land or buildings are in a contaminated state if there is contamination present as a result of industrial activity such that:
– it is causing relevant harm; or
– there is a serious possibility that it could cause relevant harm, or
– it is causing, or there is a serious possibility that it could cause, significant pollution in the groundwater, streams, rivers or coastal waters
Corporation Tax to profits earned from its patented inventions. A patent box is a special very low corporate tax regime several countries use to incentivise research and development by taxing patent revenues differently from other commercial payments. It is also known as the intellectual property, innovation, or IP box regime. Companies who take this route could enjoy a 10% deduction on their Corporate Tax bill if it exploits patented inventions and innovations.
When it comes to optimising your tax position and harnessing the benefits of innovation incentives, Tungsten Corporate Solutions (TCS) is your trusted partner. In this blog post, we’ll explore how our team of experts can guide you through the intricacies of the Patent Box regime, ensuring you maximise tax relief while minimising risk. With HMRC-compliant strategies tailored to your unique business needs, we’re here to help you thrive in the ever-evolving intellectual property (IP) taxation landscape.
Step 1: Establishing Eligibility and Substance Requirements
The first crucial step in the Patent Box journey is determining whether your business is eligible for this valuable tax relief scheme. At TCS, our project team conducts an initial assessment to evaluate your patent position and ensure compliance with the operational ownership condition and the development condition. These substance requirements are essential for accessing the benefits of the regime.
Step 2: Assessing Qualifying Expenditure and Profit Mapping
Once eligibility is established, our specialists dive deeper into the complexities of qualifying expenditure. We meticulously review your financial details, examining how income and spending align with relevant product sales, royalties, license fees, patent sales, infringement income, and notional royalties on processes or services. By streamlining your business’s income and expenditure, we comprehensively understand how profits correlate with your IP activities.
Step 3: Maximising Tax Efficiency and Mitigating Risk
At TCS, our team of chartered tax advisers and accountants brings their technical prowess. We assess how much your profits relate to your IP activity, identifying efficiencies and minimising tax risk. Further adjustments are made to trace these profits back to the R&D activities associated with your patents. By doing so, we unlock the potential for an effective 10% tax rate on eligible gains.
Step 4: Industry Expertise and Insight
Our sector specialists possess in-depth industry knowledge and a unique understanding of R&D activities across various sectors. Collaborating closely with our tax team, they help identify relevant IP income concerning the R&D expenditure incurred during the development of your IP. This comprehensive approach ensures that your Patent Box claim or project leverages the full potential of available incentives.
TCS: Your Trusted Partner for Innovation Incentives
At TCS, we take pride in providing best-in-class innovation incentive advice. Our dedicated team is passionate about the transformative power of Patent Box relief for your business and the wider economy. We understand that your innovation is unique, and so are your business needs. Our approach is consultancy-based, tailoring our services to meet your specific requirements.
Beyond Patent Box, we offer a comprehensive suite of services to support your innovation journey. From claiming R&D tax credits to maximising Capital Allowances, accessing Grants, and providing HMRC enquiry support, we are here to guide you every step of the way. Our accountant partner programme ensures a collaborative and seamless experience, fostering strategic and successful utilisation of the innovation incentive toolkit available to your business.
When navigating the complexities of the Patent Box regime and optimising your tax position, Tungsten Corporate Solutions (TCS) is your reliable partner. With our expertise, industry insight, and tailored approach, we help you unlock the full potential of innovation incentives while ensuring compliance with HMRC regulations. Contact us today to embark on a transformative journey towards tax efficiency and sustainable growth.
What is an EOT?
Key tax benefits
If key qualifying conditions are met, the following tax benefits are available:
Tungsten Corporate Service’s top priority is maximising the benefits to our clients through corporation tax relief, utilising our exemplary tax and business knowledge to add value at every opportunity.
To find out more about this service or to discuss your specific needs with a certified TCS advisor, please contact us here.
Businesses of all sizes face many challenges, which is why our well-rounded, award-winning business and financial services are designed to help our clients build strong foundations, alleviate day-to-day pressure, survive times of unrest, grab opportunities, and ultimately help our clients achieve their version of success.