In the last six months alone academic studies have shown that suffering from concussion or a more serious Traumatic Brain Injury (TBI) increases a person’s risk of developing dementia, heart attacks and even suicide. As sporting bodies across the world acknowledge the need for more research into treatment and prevention, R&D tax credits can provide valuable capital to organisations working to make sport safer.
The UK landscape surrounding head injury detection and prevention is changing at a pace. The Rugby Football Union (RFU) now requires all coaches and referees to be trained to undertake Head Injury Assessments (HIA) and other sports are following suit – the Football Association has introduced the Pocket Concussion Recognition Tool (PCRT) to be used by pitch-side medical staff where a head injury is suspected (without loss of consciousness) across all the English football leagues.
These developments are encouraging for sportsmen and women, but they also present a huge opportunity for companies to claim back R&D Tax credits to help spearhead the drive to make contact sport safer. Technological advances in protective equipment and the development of new diagnostic tools to prevent injuries occurring are at the forefront of the critical, but costly, research being undertaken across the globe. R&D tax credits can provide the financial catalyst to drive through research innovation and development – getting potentially life-saving tools and products to market sooner.
What are R&D tax credits?
In the UK, R&D tax credits are divided into two categories, dependent on the size of a business.
- For SMEs, the R&D Tax Relief Scheme can provide a reduction in their corporation tax bill of up to 26% of qualifying R&D. Additionally, businesses operating at a loss (and therefore not liable to corporation tax) can choose to surrender their R&D related losses for a payable tax credit. This means that even a business struggling to break even could receive a cash payment of up to 33.35% of what is spent on eligible research.
To be qualify as an SME for R&D tax purposes, companies must have:
- Less than 500 employees, and;
- A turnover of > EUR 100 million, or balance sheet assets < EUR 86 million.
- The R&D Expenditure Credit (RDEC) allows larger businesses to claim up to 8.8% of eligible expenses, directly reducing corporate tax liability. Businesses not qualifying under the SME definition may be eligible to apply and as with the SME Tax Relief Scheme, companies can claim for unsuccessful research and development initiatives across any sector.
What qualifies as R&D for tax relief?
For both categories eligible R&D can include:
“the creation or improvement of a product, procedure, process, program or equipment; and demonstrating originality or substantial improvement.”
The broad scope of this definition means it can incorporate organisations working across the TBI/concussion research, prevention and treatment field.
A similar scheme in America – Federal R&D tax credits, has already helped researchers and businesses to develop technologies to tackle the problem of TBIs. One such business is Force Impact Technologies (FIT) who have developed the FITGuard ™
A revolutionary piece of technology, the FITGuard ™ focusses on mitigating the risk of further damage following a head injury. It is a digital mouth guard that measures acceleration and can calculate the force of impacts that athletes experience. The data is relayed visually via LEDs built into the mouth guard and can be transmitted wirelessly and tracked by a companion app. This can help both coaches and players to detect problems the moment they occur so they can be pulled from a game – preventing athletes from aggravating injuries by continuing to compete.
Florida based company Prevacus has chosen to focus on the immediate treatment of concussions. Dr. Jacob Vanlandingham has developed a nasal spray that can be administered when a concussion is detected that can help reduce swelling and what is known as oxidative stress. This helps recovery times in sports injury situations but potentially has much wider medical applications. It could even help reduce long term negative effects associated with TBIs, like recurring migraines and depression, by reducing the length of time the brain takes to repair damage (though this has yet to be proven through clinical trials). The drug has already seen success in concussion treatment.
These three companies took different approaches to solving the problems associated with brain injuries, but they both benefited from the help of R&D tax credits.
Great strides have been made in recent years to advance TBI research but there is always more that can be done. If your company is involved with the development of TBI treatments or detection and prevention technology, you deserve all the help you can get. The average HMRC payout to a business for R&D is £50,000. Can you afford not look into whether R&D tax credits could help your business thrive?
Now is the time to act!
As global specialists in financing research and development, F. Initiatives has more than 680 scientific and technical experts across eight countries available to support your R&D activity.
Our UK office offers personalised management of your R&D Tax claim – providing a dedicated Account Manager and R&D Tax Consultant to guide you through the process. We are always mindful of the constraints on your time and our aim is to lift the burden of applying for R&D funding for you. Our non-intrusive methodology requires minimal involvement from your technical and financial departments but never short-changes you on attention to detail and our fees are based entirely on the amount of funding we secure for you.