Bringing an R&D culture to your business
“All great truths begin as blasphemies,” said the great George Bernard Shaw – in other words, the world needs people who are prepared to try stuff that looks completely crazy. That’s how we advance.
Which is why, as a society, we should – and do – reward people who are prepared to try new things. British companies that undertake innovative research and development work in science, technology, engineering and medicine can receive financial support from the government in the form of research and development tax credits – getting up to a third of their costs back in some cases.
Shouldn’t the success of these companies be reward enough for them?
First of all, groundbreaking research and development benefits us all – and not just because someone invents an app that can do the housework for us or make the object of our affections love us back. It creates employment, much of it highly skilled, and boosts the UK economy with increased investment and exports. Successful companies pay more tax, which means more money for public services. And there’s a more intangible benefit, too – they help the UK to stay a dynamic, forward-thinking country where the brightest minds can thrive, and where people want to live and work.
Secondly, part of the point of innovation is that you don’t know if it’s going to succeed. One of the government’s key tests for whether you qualify for research and development tax relief is whether you are “overcoming uncertainty” – in other words, you’ve embarked on your project genuinely not knowing if it’s going to succeed or come to nothing, with little to show for the time, effort and resources you’ve invested. That’s a real risk, and one that deserves our support.
How can my company be more innovative?
It sounds obvious, but first, it’s important that your team recognises when they’re doing work that’s really innovative. Clever people can get so used to doing clever things that they almost don’t realise they’re clever anymore. Reminding them that they are innovating and updating internal staff on the progress of projects is a good place to start. Once you and your team have learned to look at what you do with a fresh eye, you’ll be able to identify projects that might be eligible for research and development tax credits.
You’ll find this becomes self-perpetuating; the more you celebrate and embrace innovation, the more your team will be encouraged to speak up with their ideas, and the more your reputation will attract independent thinkers when you’re recruiting.
Sharing knowledge and ideas across the business is another way to promote innovation from within. Too often in companies, everyone’s focus is purely on their own role, and never anything outside that. But just because someone in your admin department can’t physically build a brilliant smartphone app, they may still have great ideas about the app’s functionality.
Applying for research and development tax credits also changes your mentality. The risk inherent in many projects can put people off undertaking them – but if you know that risk is reduced because you can claim tens or even hundreds of thousands of pounds of costs back, maybe you can afford to be a little braver. Our greatest tip is not just to think about what you can do, but about what you can’t do too. When you start asking how you could make a process or product better, you’re probably not going to arrive at solutions immediately, but you might come up with something that’s still beyond what you thought you could achieve.
If you think your work may be eligible for R&D tax credits, contact an R&D Tax Solutions specialist to see how they can help. They’ll be able to determine whether you have an eligible claim and assist with the process, giving you the best opportunity for full remuneration.