Throughout 2021 and beyond, investment in innovation will be vital if companies are to survive and grow. Luckily, R&D Tax Credits can drastically reduce the costs.
Tough times call for bold innovation
Research and development (R&D) investment is the key ingredient of survival for modern companies looking to grow, compete and thrive. This is case even in ‘normal’ times, but this year has presented the kind of challenges that would’ve been inconceivable just twelve short months ago. Yes, innovative R&D is even more vital than usual.
Many businesses have in fact looked to cut R&D spending all together. Bad idea!
When times are tough businesses tend to pull out the stops in tightening their belts. Efficiencies are sought, jobs may be lost and savings are made wherever possible.
For this reason, you may find that many of your clients have indeed put innovation projects and R&D expenditure on the back burner. But with the COVID-19 pandemic continuing to disrupt the global economy, the temptation to cut right back in this area should be avoided at all costs.
The fact is that R&D activities are essential in being able to adapt in a challenging market. Such projects demonstrate to both customers and investors that the brand is strong (even if it doesn’t feel like it) and that it is competitive and dynamic. Standing still and making no plans to grow, in whatever ways they can, will be detrimental to long term company survival.
Funding support for R&D
At Myriad Associates we’re aware through years of experience that access to funding can often be a barrier to the continuation of innovative R&D work. Luckily there are a number of supports available, often through Innovate UK (plus of course there’s also the R&D Tax Credits scheme too).
With £210 million in loans on offer under the Government’s coronavirus support package, Innovate UK aim to support businesses that are looking to maintain their R&D programme. This is in recognition of the fact that growing businesses strengthen the economy.
The good news is that the eligibility for these ‘innovation continuity loans’ has recently been widened so that more businesses can benefit. Now it’s not just Innovate UK award holders wishing to continue or follow on a project that can receive the support, but it’s now open to all businesses (as long as there hasn’t been any previous Innovate UK award during the last 36 months).
Innovate UK recognises that liquidity is an uphill struggle during these times of economic uncertainty, and that the risks of innovation need to be balanced. This is particularly the case when other funding streams have slowed to a trickle. Innovation loans are therefore an excellent opportunity for flexible innovation continuity, and may well be an option worth discussing with your clients.
How do these innovation loans work?
Loans of between £250,000 and £1.6 million are available to cover qualifying R&D expenditure plus reasonable extra R&D costs brought on by the pandemic.
The terms are flexible and loans are repaid over 7 years. The interest rate is set at 7.4% which is partially deferred to help with affordability when cash is tight.
What makes a high quality application for these R&D continuity loans?
The loans are aimed at SMEs wishing to continue with their R&D projects but that are facing economic challenges due to the coronavirus pandemic. Companies must be demonstrably able to commit to the loan long term.
Successful applicants will be those that explain what the R&D project is and why it’s fundamentally worth continuing. It will explain the market and how the project will be delivered in practice, as well as why public sector funding support is needed and how the loan is to be repaid.
The application itself has two parts. The first part consists of an expert-assessed project proposal, and the second part is a business financial survey which Innovate UK’s credit team will also evaluate. It’s all about businesses proving that despite the current hardship they are in fact viable long term, and that their R&D projects will make a real difference.
If you wish to find out more about the application process and how decisions around the loans are made, Innovate UK is offering a webinar on the 9th December 2020 from 10am until 12 noon. The closing date for applications is the 13th January 2021.
More information can be found on the Innovation Continuity Loans page of the Innovate UK website.
How Myriad Associates can facilitate a successful R&D funding claim
Whenever an organisation looks to claim any form of R&D funding, they’ll want to make sure they’ve done everything necessary for the best chance of success. Competition is fierce, and without any expert support your client’s application may well not hit the spot.
Funding for innovation is more important now than ever for your clients. The team at Myriad Associates, and the Tax Cloud portal, can therefore work with you to obtain the support your clients need.
Partnering with our team
Whether it’s R&D Tax Credits, R&D Grants or any other form of R&D support, the Myriad Associates team deals exclusively in this complex area of accountancy. With bases across the UK and Ireland, we have worked with a huge range of companies and accountancy firms alike in providing bespoke application support for maximum success.
When you partner with us as a busy company accountant, we will work with you and your client to understand their R&D aspirations and how they can best be supported. We’ll also guide you through the application process and are on hand to offer our expertise whenever you need it.
By working with us you’re not only giving your clients the best, all-round R&D funding service possible, but you’re also freeing up your own time and resource for everything else. And with tax return season coming up, it’s one less thing to think about.
We operate entirely remotely too, so you don’t even need to leave your office.
If you’d like to discuss any points raised in this article or about R&D funding supports in general, please do contact our team using our web form or call our expert advisors on 0207 118 6045. We’re here to help.
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