finance 35 We don't do R&D... do we?


When R&D is mentioned, most people imagine people in white coats in a lab surrounded by test tubes and bunsen burners. However for tax purposes it is much, much wider than that, writes Chris Denning of MHA MacIntyre Hudson


R&D tax relief provides an additional tax deduction for costs incurred on certain development activities. It has been in existence since 2000, but since 2010 the benefits have been substantially increased, and now for every £1,000 spent on R&D by SMEs, in addition to the normal £200 tax relief, there is an additional £250 saving for profitable companies, or a £326 cash payment from HMRC if loss making.


For larger companies (over 500 employees in the group), the benefits are lower. However, from April 2013, the benefit can be accounted for within operating profit (ie it will increase the accounting profit) rather than in the tax charge – as well as increasing the benefit to profitable companies (to 8%), it will make the relief more visible to the board and shareholders, and also provides for an 8% cash refund for non-taxpaying companies.


R&D includes any project that aims to achieve an advance in science or technology through the resolution of scientific or technological uncertainties, ie something that is new and difficult. The definition is therefore very broad and is likely to encompass some element of the work undertaken not just by technology companies but also a number of businesses in almost every other sector. Examples of projects that would qualify are:


• Development of a new, bespoke software system for the business (either with or without assistance from a software development firm)


• Development of a new, or appreciably improved, product


• Design and implementation of a new process.


R&D claims are commonly made by businesses in the engineering,


pharmaceutical, software development, manufacturing and biotechnology fields, but successful claims have also been made by some of our architect, design engineers and construction clients too.


The benefits of R&D tax relief reduce the cost of carrying out R&D in the UK but they are still very much under claimed, mainly due to a lack of awareness. It is estimated that only 20% of the businesses that could claim are actually claiming, and if you are part of the 80%, you are missing out on funding that your competitors may be benefiting from.


Whilst HMRC have dramatically improved its processes to streamline R&D claims, it is essential to obtain the support of an experienced tax adviser, who is able to understand how the relief interacts with your commercial objectives and is able to work with you to arrive at the most effective way to obtain the


relevant information. In many cases, as supporting documents are only required for the first claim, and every few years thereafter, you will be left with a process that enables you to make subsequent claims with only a high level review by your adviser.


If you would like to find out more information about R&D tax relief contact me on details below.


Details: Chris Denning 0118-9503895 chris.denning@mhllp.co.uk www.macintyrehudson.co.uk


deals


BCMS advises Cooper Callas on industry veteran MBI


Cooper Callas, a leading distributor of kitchen and bathroom brands, has been acquired by Philip Carr, an industry veteran in the bathroom sector, in a management buyin negotiated by Berkshire-based international M&A advisers BCMS.


Cooper Callas is a nationwide UK distributor of kitchen and bathroom brands, including its own branded range Bathrooms by Blu, and the exclusive premium marques Sottini and Azzurra.


Headquartered in Bicester in Oxfordshire, the company serves a national client base through its locations at Glasgow, Leeds and Newton Abbot, Devon.


Established in 1875, it has a long heritage in homeware and today supplies leading national high street retailers such as John Lewis.


Carr has an extensive track record


in developing and growing businesses within the UK bathroom sector. Most recently, he was engaged as commercial and marketing director at Crosswater Holdings UK. In 2006, he led Crosswater Holdings UK’s acquisition of Simpsons Shower Enclosures, and was supported in the acquisition of Cooper Callas by HMT Capital.


As part of its advisory work, BCMS researchers profiled 179 companies that could potentially acquire the business. Following discreet approaches by the BCMS deal team, 33 organisations expressed a serious interest in reviewing the acquisition. The shareholders met with nine interested parties to discuss the acquisition in detail with the proposal tabled by Carr proving the strongest.


BCMS acted as advisers to the vendors, the shareholders of Cooper Callas.


THE BUSINESS MAGAZINE – THAMES VALLEY – OCTOBER 2014


BCMS advises Energyexcel on acquisition by Ameresco


Substantially all of the assets of Energyexcel LLP, an independent energy services business, have been acquired by Ameresco Inc, a leading independent provider of comprehensive energy consulting services listed on the New York Stock Exchange (AMRC), in a transaction managed by international M&A adviser BCMS.


Energyexcel identifies and delivers innovative, quantifiable and sustainable energy savings solutions to major blue-chip clients and a number of well-known supermarket chains that are all household names in the UK. London-based, Energyexcel was founded in 2007 by five experienced energy industry specialists with a long-term vision to provide clients with high-quality, innovative engineering solutions.


The acquirer Ameresco Inc is a leading independent provider of comprehensive services, energy efficiency, infrastructure upgrades, asset sustainability and renewable


energy solutions for facilities throughout North America. Headquartered at Framingham, MA, Ameresco operates internationally, providing its expertise through 69 offices located in 34 American states, five Canadian provinces and the United Kingdom. Ameresco Inc is a listed organisation on the New York Stock Exchange (AMRC).


As part of its advisory work for Energyexcel, BCMS researchers profiled 122 companies that could potentially acquire the business. Following discreet approaches by the BCMS deal team, 32 organisations expressed a serious interest in reviewing the acquisition. The partners met with 13 of these interested parties to discuss the acquisition in detail. Following offers from five of these organisations, Ameresco Inc negotiated the preferred deal structure and went on to complete the acquisition.


BCMS was lead sale adviser to the partners of Energyexcel.


www.businessmag.co.uk


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