Creating value through innovation
Innovation has
generally been recognised as essential for value creation, both for individual
companies and for the UK economy as a whole. The development of new ideas,
processes and technologies and their flow across different sectors is a
significant driver of economic growth and productivity. Recently, innovation
has also been identified as crucial to the transition of the economy away from
fossil fuels and carbon-intensive business activities.
Many factors
affect whether and how businesses innovate, for example, the availability of
skills and capital and government policy measures such as tax incentives.
However, none
are more important than the company’s own culture, capabilities and internal
systems – all of which are aspects of its governance. Unless companies are
governed in a way that is conducive to innovation, they are unlikely to be in a
position to take advantage of new opportunities.
Our most
innovative clients share some key characteristics:
●
They
invest in activities with uncertain outcomes for which the likely commercial
return is difficult to quantify and the risk of failure is higher than normal;
●
They
benefit from the availability of company-specific skills, which may be highly
specialised;
●
They
have a culture which encourages flexibility, experimentation and a high level
of individual decision-making; and
●
They
require a longer-term time investment horizon than many other kinds of business
activity.
Research and
Development (R&D) is the process of taking an idea and transforming it into
a fully-fledged product or procedure. R&D tax credits are a government
incentive designed to encourage innovation across multiple
industries. This is an opportunity for you to reduce your corporation tax bill
or receive a refund from HMRC based on the number
of working hours and relevant costs your business dedicates
to Research & Development. Under the scheme, SMEs can claim back
up to 33% of the costs associated with R&D.
If you are
looking for long-term finance to support innovation, you will need to ensure
your management accounts are up to date, you make available detailed lists of
debtors and creditors, and you might need up-to-date projections before an
expert will consider your application.
Please
talk to us about R&D tax credits and long-term finance. Our independent
experts have many years of experience and success in advising businesses across
a wide range of sectors.
The tax reliefs and allowances
available to your business
HMRC is
encouraging business owners, employers and the self-employed to check online to
make sure they are not missing out on a range of tax reliefs and allowances.
One
page summary of all tax reliefs and allowances
HMRC’s new page
on GOV.UK summarises items that people running their own businesses should
explore that could help them keep more of what they earn. With just one click,
businesses, employers and the self-employed can find out their eligibility for
tax reliefs and financial allowances, as well as how to claim them.
These include:
Tax-deductible
business expenses
●
If
you’re self-employed, you can deduct some of your running costs as part of your
annual tax return, as long as they’re an allowable expense.
●
You
may be able to claim tax-deductible expenses for items including office
stationery, insurance, bank charges and even heating and lighting for your
office, home office or business premises.
Research
and Development (R&D) tax credits
●
If
your company is involved in innovative projects in science or technology, you
may be eligible to claim R&D reliefs which can even be claimed on eligible
unsuccessful projects.
Gift
Aid
●
Companies
(and unincorporated associations) can claim tax relief for qualifying donations
paid to charities (bodies or trusts accepted as charities for UK tax purposes).
Corporation
Tax relief
●
You
can deduct the costs of running your business from your profits before tax when
you prepare your company’s accounts. This could include things like buying
machinery or tools that you use for your business.
Employment
allowance
●
If
your business employs people, you may be able to claim Employment Allowance
which allows eligible employers to reduce their annual National Insurance
liability by up to £5,000.
Pre-trading
expenses
●
If
you are in the process of setting up a new business, you may be able to claim back
some of the expenses incurred before you started trading through your first tax
return.
Reclaiming
VAT
●
If
you are a VAT-registered business, you can reclaim VAT on qualifying goods and
services you buy for use in your business.
Business
rates relief
●
Some
properties are eligible for discounts from their local council on their business rates. This is called ‘business rates relief’. Please note that
the guidance on business rates relief on GOV.UK is only for businesses based in
England.
See: Tax reliefs and allowances for businesses, employers and
the self-employed - GOV.UK (www.gov.uk)
Recovery Loan Scheme
The new form of
the Recovery Loan Scheme (RLS) is designed to support access to finance for UK
businesses as they look to invest and grow.
Businesses can
use the finance for any legitimate business purpose – including managing cash
flow, investment, and growth. However, businesses must be able to afford to
take out additional debt finance for these purposes.
The British Business
Bank will administer the scheme on behalf of the Secretary of State for the
department for business, energy & industrial strategy (BEIS).
Key features
include:
●
Up
to £2 million per business group: The maximum amount of a facility
provided under the scheme is £2 million per business group for borrowers
outside the scope of the Northern Ireland Protocol, and up to £1 million per
business group for Northern Ireland Protocol borrowers. Minimum facility sizes
vary, starting at £1,000 for asset and invoice finance, and £25,001 for term
loans and overdrafts.
●
Wide
range of products: RLS supports term loans, overdrafts, asset finance and
invoice finance facilities. Not all lenders will be able to offer all products.
●
Term
length: Term loans and asset finance facilities are available from three
months up to six years, with overdrafts and invoice finance available from
three months up to three years.
●
Access
to multiple schemes: Businesses that took out a CBILS, CLBILS, BBLS or RLS
facility before 30 June 2022 are not prevented from accessing RLS after 1
August 2022, but in some instances borrowing under these schemes may reduce the
maximum amount you are eligible for.
●
Pricing: The
annual effective rate of interest and upfront and other fees cannot be more
than 14.99%.
●
Personal
guarantees: Personal guarantees can be taken at the lender’s discretion,
in line with their normal commercial lending practices. Principal Private
Residences cannot be taken as security within the scheme.
●
Guarantee
is to the lender: The scheme provides the lender with a 70%
government-backed guarantee against the outstanding balance of the facility
after it has completed its normal recovery process. The borrower always remains
100% liable for the debt.
●
Decision-making
delegated to the lender: Recovery Loan Scheme-backed facilities are
provided at the discretion of the lender. Lenders are required to undertake
their standard credit and fraud checks for all applicants.
The assistance
provided through RLS, like many government-backed business support activities,
is regarded as a subsidy and is deemed to benefit the borrower. There is a
limit to the amount of subsidy that may be received by a borrower, and its
wider group, over any rolling three-year period. Any previous subsidy may
reduce the amount a business can borrow.
See: Recovery Loan Scheme - British Business Bank
(british-business-bank.co.uk)
The new alcohol duty system:
consultation
In the Autumn
Budget 2021, the UK Government published a consultation which ran from 27
October 2021 to 30 January 2022, inviting stakeholders to submit their views on
the proposed reforms to the alcohol duty system.
The Alcohol
Duty Review aims to improve the current system by making it simpler, more
economically rational and less administratively burdensome on businesses and
HMRC.
The document in
the link below summarises the responses to the consultation and provides the
government’s response.
The government
carefully considered the issues raised by respondents and stated that they were
grateful for all of the input received. The response document sets out the
government’s designs for the new alcohol duty system and changes made to the
Autumn Budget proposals as a result of the consultation. Policies contained
within the response document include:
●
Amendments
to draught relief.
●
More
detail on Small Producer Relief.
●
Detail
of a transitional easement for the wine industry.
There are also
specific points of policy where the government would appreciate further input.
The government
will be taking responses until Friday 18 November 2022.
See: The new alcohol duty system: consultation - GOV.UK
(www.gov.uk)
Learn To Prepare, Prepare To
Protect
Launched in
2022, ProtectUK is a new central hub for counterterrorism and security advice.
Whether you’re a business owner, work in security, or are a member of the
public, register with ProtectUK to become part of the community and receive the
latest news and online courses that will enable you to be better protected.
By signing up
you can:
●
Access
the latest security guidance and conduct your own risk assessments.
●
Stay
informed about different threat types and how to avoid them.
●
Read
the latest news and participate in the community.
●
Take
part in online learning.
See: Welcome
to ProtectUK | Protect UK
Get support if you have a
disability or health condition through Access to Work
Access to Work
can help you get or stay in work if you have a physical or mental health
condition or disability.
The support you
get will depend on your needs. Through Access to Work, you can apply for:
●
A
grant to help pay for practical support with your work.
●
Support
with managing your mental health at work.
●
Money
to pay for communication support at job interviews.
Clean Maritime Demonstration
Competition Round 3
Innovate UK is
working with the Department for Transport (DfT) to invest up to £60 million in
innovation projects. These will be to develop and deploy real-world operational
demonstrations of clean maritime solutions in an operational setting.
The Clean
Maritime Demonstration Competition (CMDC) Round 3 is part of a suite of
interventions to be launched by the UK Shipping Office for Reducing Emissions
(UK SHORE). UK SHORE aims to transform the UK into a global leader in the
design and manufacturing of clean maritime technology.
Your proposal
must develop, test and deploy novel clean maritime technologies focused on
on-vessel technologies or shoreside infrastructure, including at ports and
harbours.
Strand
1: Vessel or Infrastructure demonstrations
Funding is
available in Strand 1 to develop, test and deploy novel clean maritime
technologies focused on on-vessel technologies or shoreside or offshore
infrastructure including at ports, harbours and wind farms.
Your project’s
total costs must be between £1 million and £8 million.
Find out more about Strand 1 and how to apply.
Strand
2: Combined demonstrations
Funding is available
in Strand 2 to develop, test and deploy novel clean maritime technologies
focused on both on-vessel technologies and their related shoreside or offshore
infrastructure including at ports, harbours and wind farms.
Your project’s
total costs must be between £2 million and £10 million.
Find out more about Strand 2 and how to apply.
Briefing
event
Innovate UK KTN
hosted an applicant briefing event for CMDC Round 3 on Friday 30 September 2022
- you can watch a
recording of the event.
Power Electronics, Machines and
Drives Scale-up competition
Drivers such as
climate change, supply chain resilience and the cost of energy mean that there
is a growing need to invest in manufacturing efficiency, particularly across
the Power Electronics Machines and Drives (PEMD) value chain.
Innovate UK’s
Driving the Electric Revolution, will invest up to £5 million in projects that
enable the scale-up of PEMD manufacturing to develop a resilient,
cross-sectoral, United Kingdom supply chain for these enabling technologies
critical for net zero.
This
competition is split into two strands.
Strand 1,
adopting manufacturing best practice
This strand
will fund feasibility studies that facilitate the transfer of knowledge,
solutions, technologies and best practice from other manufacturing sectors and
demonstrate the impact of these innovations on the PEMD supply chain.
Find out more about PEMD Scale-up Strand 1 and how to
apply.
Strand 2,
manufacturing process development
This strand
will fund innovative process development projects that impact manufacturing
cost, capability and efficiency to grow resilient manufacturing PEMD supply
chains.
Find out more about PEMD Scale-up Strand 2 and how to
apply
Hydrogen Transport Hub
Demonstration Phase 2
The Department
for Transport is working with Innovate UK to invest up to £20 million in
innovative projects.
This
competition aims to create a long-term sustainable demand for hydrogen from
transport and to de-risk hydrogen’s adoption for transport owners and
operators.
This investment
will support demonstrations of infrastructure and hydrogen-powered vehicles
across transport modes in real-world operational settings across the Tees
Valley.
Your project
can focus on one or more of the following demonstrations:
●
Hydrogen
fuel-cell transport of any size or designation
●
Hydrogen
combustion transport
●
Road,
maritime, rail, aviation transport
●
Non-road
mobile machinery, such as forklift trucks and construction machinery
●
Agricultural
and forestry tractors
●
Emergency
and rapid response vehicles
●
Special
purpose vehicles
Zero Emission Propulsion CR&D
competition
Innovate UK
has announced a new collaborative research and development (CR&D)
competition. UK-registered businesses can apply for a share of up to £10
million for net zero propulsion innovative projects.
Projects must
demonstrate significant improvements in net zero propulsion technologies which
may apply across multiple transport modes.
The programme
aims to build on previous sector-specific mobility programmes by creating a
cross-sector platform. You are encouraged to apply your knowledge and
capability to adjacent transport sectors including automotive, aerospace,
maritime and rail.
Your project
must focus on one or more of the following transport sectors:
●
Maritime
- Clean maritime technologies for all sizes and categories of maritime
vessels are in scope. Solutions can be suitable for one target size of vessel
or multiple. Leisure and commercial vessels are in scope.
●
Rail
- Technologies can target all locomotive classes including those for
freight and passenger carrying services and carriages.
●
Automotive
- Technologies can cover both niche and mainstream on and off-road
vehicles. This includes categories L (mopeds and motorcycles only), M (car and
passenger carrying) and N (goods vehicles). Construction vehicles and special
use vehicles such as emergency vehicles (for example, ambulances and fire
engines), refuse collection vehicles, and recreational vehicles (for example,
motorhomes) are also eligible. There are restrictions on the use of hydrogen
combustion.
●
Aerospace
- Technologies for drones or unmanned aircraft systems (UAS), advanced air
mobility (AAM), and electric or hybrid passenger aircraft.
Your
project must address one or more of the following:
●
Improved
range and overall system performance capability
●
Decreased
total cost of ownership
●
Adoption
of and transition to zero-emission end products
●
Strengthening
of the UK supply chain
No comments:
Post a Comment