Industry characteristics
- People costs dominate, and R&D staff often overlap with production and management;
- Long project cycles with spending spanning financial years;
- Involves equity incentives, external financing and IP strategy.
Key exposures
- No basis for aggregating R&D staff time and costs, weakening the super-deduction position;
- R&D and production not separately accounted for, so project inputs cannot be explained;
- Insufficient IP and R&D management documentation for high-tech recognition;
- Tax implications of equity incentives and financing not planned in advance.
How we work
- Set up an R&D project ledger aggregating personnel, materials and external inputs by project;
- Standardise the basis for time and cost allocation so aggregation is traceable;
- Complete IP and R&D management documentation against policy requirements to form a filing working paper;
- Consider tax implications at the design stage of financing and incentive plans rather than adjusting afterwards.