Get it right and you have the basis of a potentially significant claim. Get it wrong, as a lot of life sciences companies do, and you could end up with a swarm of HMRC inspectors buzzing around your head.
As the UK's leading R&D tax relief specialist, let us share a few of the secrets to successful claims with you.
DON'T UNDERESTIMATE YOUR UPFRONT COSTS
This applies to all biotech, but pharma in particular where the time taken to get first idea to market placement of a new drug can be enormous, along with the associated costs. For fear of over-claiming, traditional tax advisors typically take the 'safe' route of advising clients that the time spent at these very early stages isn't eligible, when in fact it is.
IT'S OK TO FAIL
No one likes a research project to fail but from an R&D tax relief perspective, this is often a sign of eligibility. This applies to all areas of biotech, but especially animal breeding where the considerable time and effort devoted to genetic analysis of agriculturally important organisms or phenotypes doesn't always pay off, at least not in project terms. The good news is that the same technical difficulty that caused the project to fail could also form the basis of a significant claim.
THE SAME BUT DIFFERENT
If you're involved in pilot production, there are a few more things you should know. Diagnostic companies that produce pilot assay kits, reagents or solutions, for example, can't claim for lost production or opportunity costs, but can claim for the staff time, raw materials, subcontractors, software and utilities that go into the development and testing of these products. It's subtleties like this that can make all the difference between a successful claim and one that sparks an HMRC enquiry.
GROUNDBREAKIGN OR JUST RAKING OVER OLD GROUND?
It doesn't matter how intricate or tailored the final result may be. Simply reconfiguring an existing IT package doesn't constitute R&D in the eyes of HMRC. Medical devices companies need to be especially wary of this, but it applies to the whole of the biotech sector.
PARTNERSHIP IS THE WAY TO GO
The key point to take out of all these examples is that specialist knowledge is key. With a proven track record of making literally hundreds of successful claims for biotech and contract research organisations, Jumpstart represents a simple and effective way to boost much needed funding.
Isn't it time you joined other biotech and CROs in securing your share of R&D tax relief?