Medtech Innovation & Tax Relief: A Perfect Match
posted 2nd March 2022
Award-winning tax relief specialist Access2Funding will be exhibiting at Medical Technology UK 2022, sharing expert advice on HMRC's tax reliefs for innovation.
According to the Office for Life Sciences, 65% of life science industry businesses operate in the Medtech sector. From medical device engineers to manufacturers of moulded plastic components, Access2Funding wants to highlight how many of these businesses may be eligible for tax relief for the work they do.
These tax reliefs are a valuable source of funding for Medtech businesses, which can assist with future business growth.
Karen McCann, tax manager at Access2Funding, said: "Research and development (R&D) tax credits are a HMRC incentive that offer large companies and SMEs the opportunity to claim up to 33p for every £1 spent on qualifying R&D activities, given in the form of a reduction in corporation tax or a cash credit. Medtech businesses often use this to fund further innovation, employ new staff or purchase new equipment.
"In the same vein, R&D capital allowances (RDAs) can be claimed for fixed assets purchased for the purposes of performing R&D - RDAs allow a 100% tax relief on this expenditure, including the purchase and improvement of buildings used for R&D activities.
"Another form of funding that rewards innovation is the patent box scheme. This applies to Medtech businesses that generate a profit from patented inventions and intellectual property (IP) in the UK, providing a reduced rate of corporation tax of 10%. As the main rate of corporation tax is set to increase from 19% to 25% from April 2023 (for companies with annual profits larger than £250k), patent box provides businesses with the opportunity for an even greater tax saving and means of financing business growth."
Client case study: JKL Mouldings Ltd reinvest £116k tax relief in energy-efficient machinery
UK, North East based JKL Mouldings Ltd secured more than £116,000 in R&D tax relief thanks to the innovation demonstrated in its projects.
Established in 1971, the plastic injection moulding business boasts more than 35 years' experience within the plastics industry and provides full customer-led project management from initial component design phase to optimising tooling manufacture.
Through investing in continued research and development, with their innovative approach to the design and manufacturing of plastic injection mouldings, they have been successful in maintaining steady growth over the years.
They are constantly working at the forefront of their industry in trying to find solutions for all new and existing customers, which have benefitted from these developments.
Each project completed by the company must undergo varying levels of research and development with every product being thoroughly tested before full-scale manufacturing begins, to ensure the quality they aim for is achieved.
Working with the R&D team at Access2Funding, JKL Mouldings received more than £116,000 for their first R&D tax credits claim.
Blaine Patton, factory manager at JKL Mouldings Ltd, said: "Delighted with the amount and the efficiency of the service!"
Finding innovative solutions to customer challenges has always been at the heart of JKL Mouldings' growth, however, its ability to claim tax refunds under the government's R&D tax incentive scheme has created a wealth of benefits to the business.
Blaine Patton concluded: "We are able to re-invest the R&D tax return in purchasing energy-efficient machinery and lighting."
Access2Funding has in-house experts in science, molecular biology, pharmaceuticals and engineering, and will be on stand 4 at Medical Technology UK on 16-17 March 2022.
Registration for the entire Exhibition, Learning Programme and Women in MedTech Forum is now open.
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