Top 5 R&D myths for shipping and offshore maritime companies

Moore Stephens’ specialist Innovation & Technology team successfully manage R&D claims for many clients in the sector. The team comprises engineers, software programmers and scientists, as well as specialist finance professionals such as auditors and tax accountants all of whom are experienced in claiming R&D tax relief.

While R&D is critical it can be costly, not only in itself but also that payback can take months, if not years. The UK has some of the most effective tax reliefs available for this type of expenditure in the form of R&D tax credits.

What surprises many clients in the shipping and offshore maritime sectors is that they are already likely to qualify for R&D tax credits.

Examples of recent successful claims include the design of gas terminal infrastructure, the development of oil spill recovery systems, software for self-driving boats and much more!

Clients we have helped in the sector include Optimus Services, AFGlobal, Vikoma, MJM Marine, Autonomous Service Vehicles, Dryad Maritime, Blu Marine and Shipserv to name a few.

R&D tax credits are unusual as they provide the taxpayer with the opportunity of claiming more in tax relief from HMRC than they have paid in tax. These credits are aimed at companies that are actively involved in R&D.

We have found that there are many myths surrounding R&D that have stopped companies from claiming R&D tax credits. Below are the top five myths.

1. R&D tax relief is only for companies that are inventing something brand new for sale
Incorrect:
You do not have to be inventing a brand new product in order to qualify for this relief. More often than not it is claimed by companies who are improving existing products or internal processes.

2. We don’t pay corporation tax so there is no benefit to us
Incorrect: All companies in the corporation tax regime whether they are large companies (after April 2013) or SMEs who are not paying corporation tax can actually get a cash credit through R&D – cash back in your bank account.

3. Customers paid for us to carry out R&D and therefore we cannot claim
Not necessarily the case: In certain circumstances it is possible to make a R&D claim for R&D work that a customer has asked you to carry out and have even paid you for.

4. R&D tax relief is only for companies with ‘men in white coats’
Incorrect: Whilst pure research usually qualifies for R&D tax relief, HMRC’s sector analysis of claims shows that shipping and offshore maritime are in fact the sectors where claims are being made. Any company that is involved in technological or scientific problem solving could be eligible for R&D tax relief. This can include seismic research, software developers, production, engineering, construction or even demolition companies.

5. If we try to claim for R&D tax relief, HMRC will start investigations into all our tax affairs
Incorrect: All R&D claims in the UK are administered through specialist R&D HMRC offices. A quality report that is submitted with your claim should deal with all HMRC points of interest and concerns and not trigger an investigation.

For further information please contact Michael Simms or Laurence Kingdon.

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