The Medical industry is split into many sub divisions. All aspects of medical development in one way or another stem from scientific research and subsequent practical application of the findings. These activities can, in many situations qualify for medical R&D tax credits.
Many companies within the supply chain of the medical industry often omit to claim Medical R&D Tax Credits. This is often due to their assumption that:
- Loss making companies can’t claim – wrong
- The R&D is sold on to another company, so they can’t claim – wrong
- The attempt failed – wrong
- Part of the project was subcontracted out – wrong
Medical R&D Tax Credits – What Qualifies?
The medical sector is continually researching and developing. Whether the driver is change in legislation, seeking advanced understanding of science or commercial efficiencies, the projects can all qualify for Medical R&D Tax Credits. For example:-
- Development of software to sync various health care providers and services. An example often found in care homes, primary care trusts and local GP’s.
- Development of devices to assist, possibly
- surgical or non-surgical application,
- non painful injections,
- new forms of stents for heart surgery.
- Chemical research, lab work to adapt a raw material into a useable sustainable product. For example to treat asthma, blood pressure, headaches.
- Improvement of existing drug formulations, perhaps to reduce side effects or available audience or dosage.
- Designing, developing, and testing prototypes.
- Trials to determine the success or failure of R&D projects.
The above illustrates, the medical industry to be a hive of R&D activity.
Why Does the Medical Sector Qualify?
Especially relevant is HMRC’s guidance on R&D Tax Relief Claims. HMRC’s guidance clearly sets out the qualifying parameters. Clearly some of the key aspects of the medical sectors R&D projects include:-
- The advance must be for the benefit of knowledge in the field, not just the company’s own knowledge.
- The project must seek to advance science or technology. Science is the systematic study of the nature and behaviour of the physical and material universe. Technology is the practical application of scientific principles and knowledge
- Advancements are made by overcoming scientific or technological uncertainty.
The Benefit
Regardless of size, cashflow is one of the most important areas of managing a successful business. Successful claims for Medical R&D Tax Credits will result in a cash injection. 25% is the average cash saving achieved on development projects. Specific calculations apply dependent on if your company is a:-
- Profitable SME
- Loss making SME
- Large company
All size of company can claim and receive a R&D cash incentive from HMRC.
When HMRC guidance and Tax Legislation is not met the claim will be rejected. Together with the reluctance to invest resource into claiming, this is the main reason many companies fail to attempt to claim. This is where our specalist team come in. Within the first 10 minutes of an initial call we will be able to identify the potential for your company to claim Medical R&D Tax Credits.
Regardless of where your company is in the R&D cycle it is always worth a quick no obligation chat with a member of our team to determine if you or your contacts can benefit from this generous relief.
