Offshore Europe Attendees – are you missing out on R&D tax relief?

As Europe’s leading E&P event continues until the end of this week at SPE Offshore Europe, over 900 suppliers will be preparing to showcase their cutting-edge technology. Research and Development (‘R&D’) tax relief is a government initiative aimed to support such innovation – are you missing out?

An industry report released this year found a trend of increased investment in R&D; North Sea operators and contractors have upped their spend in the UKCS by around 45%.

R&D tax relief is available to companies attempting to push the boundaries of science and technology.  However, it is important to note that development work can also qualify, for example, appreciable improvements made to existing products or processes to create efficiencies. The government’s continual encouragement for companies to claim R&D tax relief is paying off as the report highlighted 35% of firms are choosing to invest in R&D in the UK because of the tax relief available.

However, 20% of those who contributed to this report state that they do not currently claim the R&D tax relief that is potentially available to them.

Qualifying activities can generate cash benefits, either in the form of payments from HMRC or a reduction in tax payable.  R&D tax relief is available to both large and SME companies, and benefits can still be attained even where the claimant company is incurring losses.

Examples of qualifying R&D activities in the industry include research into health and safety advances, the development of processes and products to achieve time and cost savings, and adapting equipment for hostile environments.

How can AAB help?

• Establish whether your company qualifies for R&D tax relief;
• Calculate the tax benefit;
• Provide advice on the requirements for supporting documentation and records;
• Work with you to prepare and submit claims to HM Revenue & Customs and deal with any subsequent enquiry.

By Andrew Blair, Corporate Tax Senior Manager at Anderson Anderson & Brown LLP.

Find out more about our Corporate Tax Team.