Run by the UK government, the R&D Tax Credits scheme aims to encourage New and Growing Companies’ spending on innovation and R&D activities.
Simon Elliott works for SSP Ltd, a company that helps technology companies claim research & development Tax Credits. For example, if you employ or outsource software developers to write code, you could recoup between 20-33% of that expenditure. This even applies to loss-making companies (in particular start-ups).
Simon explains to us that the development work does not have to be ground breaking to qualify. It could be as simple as making existing code more efficient, or developing an interface between two products.
Simon is working out of Club Workspace Kennington. He took some time to tell us about how he got into the business and how he could help your company.
Tell us about yourself
Well, believe it or not, I’d rather be writing songs on my guitar for a living than helping companies claim R&D Tax Credits! That said, as ‘jobs’ go it’s pretty darn good. I teamed up with my father six months ago, as the R&D Tax Credit side of his business was growing nicely.
I’d actually introduced him to the scheme five or so years ago and then gone off to work for various marketing research agencies. So, I’m now back to reap what I sowed!
What does SSP Ltd do?
We primarily help small businesses (mostly software) claim R&D Tax Credits. We also advise and facilitate M&As within the technology sector.
Which small businesses are eligible to claim R&D tax credits?
Any businesses are undertaking research and development! Well, there are a few caveats: you must be a limited company; have less than 500 employees; and turnover less than £100 million. But let’s face it, that’s most companies.
The real trick is understanding what actually defines ‘R&D’. If you go onto the HMRC website, you’d be forgiven for thinking that you’d need to be developing the next lunar probe. The reality is much different. If we take software as an example and you are trying to write code that is unique, and there is uncertainty in the outcome (i.e. it might not work), then you are pushing the boundaries of technology.
Even if you are trying to solve the same commercial problem as someone else, but doing it in a faster, more efficient way then you are most likely eligible.
What should these businesses do?
Speak to me! A few questions and I’ll quickly be able to assess your eligibility. You’ll also be given a rough estimate of how much you’ll likely receive back in cash from HMRC (usually between 20-33% of whatever you’ve spent on R&D). Or alternatively, have a chat with your accountant.
Some offer a full service, but most tend to process the numbers and leave you to do the tricky part – the technical narrative. The technical narrative is essentially what HMRC require in order to assess your eligibility.
Can you give us an example of a business you've helped?
One of our clients is developing a dating platform for gay and bisexual men and women. They had an already established brand and presence through their website. However, over the last two years they’ve done a lot of development work on creating both iOS and Android mobile apps. Because the structure of their database was constructed in house years ago, the skills needed to integrate with modern mobile applications were unique. Thus, the development work they undertook was unique and subject to many roadblocks along the way.
They actually spent a lot of time and money trying to integrate the old with the new, but in the end decided to give up and start again. The consolation of this however, was that they could claim back around 20% of that wasted development spend.
What trends are you seeing in your industry?
We are the only R&D Tax specialist for the software industry, so software really is our industry as opposed to R&D Tax Credits. A lot of clients are facing the same problem – moving their product onto the cloud (so you can access it from a web browser from anywhere), whilst also servicing customers who still want to use the desktop version of their product (using servers based within the company and not ‘in the cloud’). So, moving everything to the cloud is the big thing at the moment in the software industry.
However, given the potential security threat to your data being stored in a warehouse in Utah and cyber-related crime seeing no signs of relenting, I wouldn’t be surprised if in five to 10 years’ time companies start to move their data back onto their internal servers.
Why did you move into Club Workspace?
I work two to three days a week in Woking and the rest at Club Workspace if I’m not at meetings. I’ve tried working from home, but I’m just so much more productive when I haven’t got distractions like my guitar or bed right there.
What's the best bit about co-working?
I get more work done! I like the events and networking opportunities too. The people who work here also seem very driven, which can only be a good thing to be around.
For more information, please get in touch at firstname.lastname@example.org.