Are you an SME?
If you are, you can qualify for a 150% 'superdeduction' on your declared profits for R&D expenditure and a 100% relief on the money you spend with BHR Group! You can take the money as tax relief, or some of it can be taken as a cash refund.

What is an SME?
As a rule of thumb, an SME (small to medium employer) is defined as a company with less than 250 employees and an annual turnover of less than E40M or balance sheet of less than E27M. Use the link below to get a fuller definition

How does it Work?
As of April 2000, the inland revenue allowed SMEs to claim enhanced tax relief of 150% of the cost of their R&D efforts. As with all such things there are extensive ground rules but, broadly speaking, the main parameters are that:

• The expenditure has to be revenue expenditure, not capital.
• The relief is reduced for projects which are receiving other government or EU support.
• There is a minimum level of qualifying expenditure of £25K in any accounting year.
• R&D is broadly defined, but you can't claim for things like legal and admin work, marketing and operational research.
• Internal and sub-contracted works are both eligible (albeit at slightly different levels of relief).
• Internal staffing and facilities need to be reasonably dedicated and their use fully documented to allow auditing of the expenditure, although some support costs can also be claimed.

What relief do I get on work sub-contracted to BHR Group?
It is recognised by the Inland Revenue that the cost of establishing, operating and recording the expenditure of an R&D section to audit standards is significant. Therefore, provision has been made to enable SMEs to receive relief on expenditure with specialist R&D companies. As of April 2000, the rules state that 65% of contracted R&D payments qualify for relief. This means that, with the superdeduction rate set at 150%, you can offset just under 100% of your sub-contract cost.

For Example?
If you spent £20,000 of money in-house and £15,000 on a sub-contract with BHR Group within an accounting year, the maths look like this:

This means that with corporation tax at 20%, the cash benefit on the work that BHR Group did for you will be nearly £3000 - contributing to a total cash benefit of just under £9000!

Where do I get more information?
Please see the Inland Revenue's web pages on R&D relief for SMEs at http://www.inlandrevenue.gov.uk/r&d/rd_booklet.htm#23