2020 was an incredibly difficult year for all; the social and economic impacts of COVID-19 and lockdown restrictions have been significant for many individuals and business. However, amongst these challenging conditions, there have been incredible success stories of companies who have reacted to this environment and have been able to adapt and thrive.
For some business owners, the lockdown served as an opportunity to step back from the daily operations of the business and allowed more time to focus on innovation; we have seen the development of new products and service offerings as well as the modification and upgrade of existing ones. Conversely, some companies were forced to reinvent their business, with existing offerings and processes rendered unfeasible during lockdown. For example, many businesses in the exhibitions and events industry pivoted with great success! Whilst lots of business owners do not realise it, this period of adaptation and innovation has inadvertently seen significant amounts of Research and Development (R&D) being undertaken.
R&D Tax Relief is a generous government-ran incentive that allows companies to be rewarded for these innovative activities, through either a Corporation Tax reduction, refund or cash credit. Essentially, the incentive allows companies to receive between 19-33% of the funds that they have incurred on R&D expenditure (and can be recovered up to two years retrospectively).
Apogee have been in the fortunate position to be able to support companies with their applications for R&D Tax relief, helping businesses gain access to what can often be vital funding. This has helped support companies through this difficult economic climate whilst also enabling them to continue investing in innovative R&D activities.
There are a wide range of activities that companies have undertaken in the past year. The below serves as some brief examples of activities undertaken during “lockdown” that could qualify for R&D Tax Relief, but are no means exhaustive:
- The development of bespoke IT systems and software, to allow to company to move from an office based to a more remote and virtual working environment.
- The development of new products aimed to help to tackle and mitigate the risks of COVID-19 i.e. facemasks, PPE and remote hand wash stations.
- The modification of existing products in order to comply with new guidance e.g. adding antibacterial properties or the production of protective screening.
- Companies who have pivoted operations/offering to develop new products e.g. a gin company who pivoted to the development of hand sanitiser.
- The conceptualisation and redesign of processes and systems to accommodate new guidance e.g. social distancing, whilst maximises efficiency of operations.
- The development of automated processes to account for the reduced number of staff able to attend and work on-site.
- Design and development of online platforms and portals to allow companies to operate entirely online e.g. the integration of sales/accounting/CRM systems, or the development of bespoke ordering/booking systems.
The team at Apogee would welcome the opportunity to learn more about the innovative activities that companies have undertaken and to guide you through how these activities may allow you to benefit under R&D Tax Relief.