1. Hello

3. Pump Priming Innovation
The UK: A Great Place to Innovate
R&D Grants
Pump Priming Innovation
SEIS/EIS
Gets things
started
R&D
Tax Credits
Rewarding
Innovation
Patent Box
Rewards
Commercialisation

4. SEIS and EIS – Equity Funding
For early stage companies
Offers 50% tax relief to investors who buy new shares in your company
Capital Gains Tax (CGT) exemption on gains from SEIS investment
Maximum of £150,000 through SEIS investments
For small, high-risk companies
Offers 30% tax relief to investors who buy new shares in your company
Raise up to £5 million each year and a maximum of £12 million in companies lifetime
Investment must be made within 7 years of companies first commercial sale

5. An intro to the UK/EU Funding Landscape
SME Instrument
Fast-Track to Innovation (FTI)
Future and Emerging Technologies (FET)
Shift2Rail
Smart Grants (formally Open Grants)
Innovation Loans
ISCF (Industry Strategy Challenge Fund)
Themed Competitions
Involved with outside organisations to provide funding e.g. Network Rail
SBRI Competitions

6. Target Areas for Grant Funding
Innovate UK – Industrial Strategy Challenge Fund

7. Innovate UK: Smart Grants: April 2019
R&D Funding for disruptive innovative projects in any industry sector
Innovation leading to new product, process or services
A strong and deliverable business plan
Clear & anticipated growth impact leading to significant ROI
Projects must demonstrate:
Closing Date:
24th July 2019
Feasibility Studies
(including market research)
Industrial Research
Experimental Development
Projects can focus on:

8. Market/fundamental research Experimental development
Innovate UK: Funding Rates
100% success rate
79% success rate
Applicant
business size
Market/fundamental research
Feasibility
Studies
Industrial research
Experimental development
Micro/small
Medium
Large
100%
70%
60%
50%
45%
35%
25%
Research and Development Funding
30th November 2017 8

9. Funding Timeline
e.g. Innovate UK – Smart Grants: April 2019

10. Wider UK Funding Research, Development & Technology Funding
8 Challenge Statements
Complete a R&D Challenge Form
Invite to interview
Benefit:
Some cash
Access to market
Work alongside Network Rail
Access to test facilities
SBRI First of a Kind (FOAK)
Previous Rounds:
Round 1: Demonstrating tomorrow’s trains today
Round 2: Customer experience in stations & decarbonisation
Round 3: Resilience, freight, noise & environment
Competitions ran by Innovate UK

11. Wider UK Funding Rail Safety and Standards Board Ltd
Data Sandbox+
£650,000 available
To deliver innovative data-driven solutions to key operational performance challenges in the rail industry
Closing Date: 5th July & 2nd round due to open 2nd September
Shift2Rail Joint Undertaking (S2R JU)
5 focus areas –
Cost-efficient and reliable trains
Advanced traffic management & control systems
Cost-efficient and reliable high capacity infrastructure
IT Solutions for Attractive Railway Services
Technologies for Sustainable & Attractive European Freight
Run via Horizon 2020 calls

12. Wider UK Funding Local Enterprise Partnership (LEP) Funding
Open Call Innovation Focus Areas
1. Assistive technology for rail staff - innovative solutions to work in combination with existing railway security measures and the ‘See it, Say it, Sorted’ campaign to detect unusual behaviour.
2. Screening Train Carriages - There is a need for a device that is able to scan train carriages and determine if any foreign objects have been left behind.
Local Enterprise Partnership (LEP) Funding

13. Grant Funding Top Tips Read and understand the competition criteria
Attend briefing event and register interest
Agree a costed and expanded plan ASAP
Get partner commitment early
Answer all questions and bullet points
Leave plenty of time for writing, review and uploading

14. TBAT Case Study Grant Awarded from Innovate UK: £1.2 million
Specialist business involved with the remote monitoring of bolted assets in rail infrastructure.
Industrial Research – remote-condition monitoring technology for voids, noise impact & switch movement at Switches & Crossings
Feasibility Study – using safety critical fastener management technology in energy & power generation industries
Development and demonstrator of ‘Smart Washer’ technology to alert for preventative maintenance at Switches & Crossings
Grant Awarded from
Innovate UK:
£1.2 million
Accelerating Innovation in Rail 3
First of a Kind
(FOAK)
Accelerating Innovation in Rail 5

15. What are R&D Tax Credits?
The R&D tax credit scheme is a HMRC incentive
designed to inspire innovation & increase spending on
R&D activities by companies operating in the UK.

16. The 2 different R&D Tax Credit Schemes
Less than 500 employees or less than €100 million turnover.
Benefit of £26 per £100 on R&D if profit making
Benefit of £33 per £100 on R&D if loss making
Claims can go back 2 full years
Over 500 employees or more than €100 million turnover.
No minimum R&D spend
No upper limits on claims
Benefit of £9.70 per £100 on R&D

17. Or, Benefit of £5,200/R&D Costs of £20,000 = 26%
How does the SME scheme work?
No R&D Claim
With R&D Claim
Turnover
£100,000
Costs
£50,000
R&D Costs
£20,000
Net Profit
£30,000
R&D 130%
£26,000
New NP for Tax
£4,000
20%
£6,000
£800
To take home
£24,000
£29,200
Benefit
£5,200
Or, Benefit of £5,200/R&D Costs of £20,000 = 26%

18. R&D Tax Credits: The Timeline
31st Dec 19
31st Dec 16
31st Dec 17
31st Dec 18
Must be claimed by 31/12/19
Generates Tax Repayment or
extended losses
Company tax year 2
Company tax year 1
Current company tax year
Must be claimed by anniversary
of accounts submission to
generate repayable credit
2 full company tax years plus current one
Carry losses forward
Revenue & Intangibles costs only

19. R&D Tax Credits: Why Bother?
Uplift of R&D costs offset against company profits reducing tax payable – worth 25p in the £1
Reviewing earlier years R&D activity, Uplift of R&D costs reduce profits in those years and create tax refund.
Carry losses backwards
Loss making company can claim up to 33p in the £1
CASH BACK
TAX REDUCTION
EXTENDED LOSSES
TAX REBATE
Uplift of R&D costs pushes company into loss, use to extend losses against future profitability – good for near to market R&D companies

20. What is R&D for tax purposes?
Activities that seek to:
Achieve an advance in overall knowledge or capability in the field of science or technology
and
Resolve scientific or technical uncertainty

21. R&D Tax Credits: Are we eligible?
You are likely to be eligible to claim if you are working on:

22. What is R&D for tax purposes?
Prototypes
Test Rigs
New Device
New Process
The Lab Coats

23. What is R&D for tax purposes?
Prototypes
Test Rigs
New Device
New Process
Customer Funded work
First in Class
R&D for Production issues
Technical Process Enhancements
Beta Trials
Project Management
Management Input to R&D
Product Improvements
Duplicating Existing Products in a new way
Prototype Tooling
The Lab Coats
The Engineers

24. What is R&D for tax purposes?
Prototypes
Test Rigs
New Device
New Process
Customer Funded work
First in Class
R&D for Production issues
Technical Process Enhancements
Beta Trials
Project Management
Management Input to R&D
Product Improvements
Duplicating Existing Products in a new way
Prototype Tooling
The Lab Coats
The Engineers
IP Processing
Rent, Rates, Depreciation
Concept and Idea Analysis
Cosmetic and Aesthetic Work
Marketing & Product Launch Costs
Finessing Production Issues
The Marketers

25. Project Life Cycle
Initial Technical and Commercial Research
Initial Prototyping and Technical Effort
Core Development Effort
Roll-Out / Commercialisation
Project Progression
Cost
Area under graph line represents proportion of total costs that are eligible for R&D Tax Purposes

26. R&D Tax Credits: What can be claimed?

27. R&D Tax Credits: Eligible Rail Activities

28. R&D Tax Credits: IP Ownership
You have completed R&D work for a client. To work out if you can claim, you need to answer 2 questions…
What is the size of your client?
Your Client
You
You can claim R&D Tax Credits via SME Scheme!
No claim to be made.
SME
Large
You can claim R&D Tax Credits via RDEC Scheme!
Who owns the IP?

29. Worked Example - SME

30. R&D Tax Credits Top Tips
Consider work you have completed for clients
Compliance with legislation can still lead to innovation
Have you installed new production lines?
You can still claim R&D tax credits if your project was grant funded
Not all accountants understand the subtleties of the scheme

31. Case Studies: R&D Tax Credits

32. Patent Box A cash resourced company innovates and creates IP
A reduction in Corporation Tax on profits from patented inventions
Can reduce Corporation Tax to 10%
Elect for Patent Box within 2 years of accounting period
UK and EU
Patent Office + other EU Economic Area
Products and Processes that are patented
A cash resourced company innovates and creates IP

33. TBAT Connections
We are proud members of and provide regular funding updates to:

34. Sam Stephens | Director | 01332 819740 | info@tbat.co.uk
TBAT’s Success
Our consultants work tirelessly to maintain our impressive success rates; allowing our clients to stay competitive in their sector and continue to innovate!!
Sam Stephens | Director | |

35. Q&A

36. Thank You