CONTENTS

BRITISH INNOVATION

A springboard to global growth
Andrew Cahn, UK Trade & Investment

Innovation: the business of shaping our world
David Golding, Technology Strategy Board

Going global
Jonathan Kestenbaum, NESTA

Diversity is good for innovation
Annette Williams, UKRC for Women in SET

Promoting physics supporting physicists
Institute of Physics

The cost-saving CEO
Taylor Wessing

The BIC network
UK Trade & Investment

Innovation inspires R&D tax relief
PricewaterhouseCoopers

OPEN INNOVATION

KEY TECHNOLOGY

Addressing cross sectoral issues
Integrated Products Manufacturing KTN

Research Councils

Meeting the global challenge
Research Councils

The UK?s National Science and Innovation Campuses
Science & Technology Facilities Council

Aerospace & Defence

Enabling technology through innovative approaches
Aerospace & Defence KTN

Defence technologies for civilian applications
Ploughshare Innovations

Biometrics

Securing the future
Intellect Association for Biometrics

Biotechnology

Supporting life sciences in the capital
London First

Tackling the threat of electronic crime
Cyber Security KTN

Electronics

From invention to innovation
Electronics KTN

Grid Computing Now! KTN

Energy

A global fusion
UK Atomic Energy Authority

Design for a one planet economy
Giraffe Innovation

Managing carbon in the corporate and public sectors
Greenstone Carbon Management

Towards an energy efficient future
British Electrotechnical and Allied

Manufacturers Association (BEAMA) Home help
Energy Institute

Healthcare

Connecting people and technology
Health Technologies KTN

A centre of excellence for innovative translational research
University of Birmingham

Feeling your way to design success
NHS Institute for Innovation and Improvement

University-industry collaborations
Imperial College London

Lost in translation
Pearson Matthews Innovation Consultants

Location and Timing

Location and Timing KTN
Intelligent Transport Systems

Mapping the route to intelligent transport systems deployment
Innovits KTN

Drive down fleet costs and reduce carbon emissions?
Energy Saving Trust

DRIVENet and sustainable vehicle engineering
Oxford Brookes University

Manufacturing

Breaking the mould
Manufacturing Technologies Association

University of Nottingham

An innovative history
Scott Bader

Innovation for tomorrow?s built environment
Modern Built Environment KTN

MATERIALS

Innovations in materials deliver value for money
Materials KTN

Nanotechnology

Nanotechnology in the UK
Nano KTN

Linking technology push with market pull
NanoCentral

Running the risks
European Nanotechnology Trade Alliance

Nanofabrication solutions
Kelvin Nanotechnology

Innovative science for global applications
Oxford Instruments

Leading positive change for global industry
The Centre for Process Innovation

PHOTONICS

Making light work for industry
Photonics KTN

SENSORS & INSTRUMENTS

Unlocking the potential of the UK?s sensing community
Sensors & Instruments KTN

CENTRES OF EXCELLENCE

Investing in the future
Invest Northern Ireland

Ulster innovation delivering business success
University of Ulster

Focus: Northern Ireland

Belfast ? a city of creativity and innovation
Belfast City Council

A natural centre for innovation
London Development Agency

England?s East Midlands ? an innovative region
East Midlands Development Agency

Making it in Leeds
The City of Leeds

Collaboration in wireless technologies
Wireless Centre of Industrial Collaboration

Industrial Collaboration at the University of Leeds
Engineering Design CIC

Innovations
One North East

Focus: North West of England

Connectivity, Catchment, Cost
St. Helens

Focus: South West of England

Be part of the equation
West of England Partnership

All change for Hastings
Innovation Centre Hastings

ITI Scotland

UK SCIENCE & TECHNOLOGY PARKS

Raising the standards
UK Science Park Association

Special focus: collaboration
Edinburgh Science Triangle

Innovation: the key to economic growth
County Durham Development Company

Solutions across boundaries
Norwich Research Park

Partnership provides innovation success
Wolverhampton Science Park

BUSINESS SOLUTIONS

The outsourcing advantage
Business Services Association

Fast start UK
Tenon Outsourcing

Inward investment trends
HSBC

Divine intervention
British Business Angels Association

Know your rights
Intellectual Property Office

A perfect patent
Beresford & Co

Putting IP at the centre of business strategy
Cambridge Intellectual Property

USEFUL INFORMATION

Science lessons
GovNet Communications

Useful addresses

BRITISH INNOVATION

Lesley Hill

Innovation inspires research
and development tax relief

The government?s support of innovation through enterprise research and development was recently bolstered with an increase in the R&D tax relief rates and the doubling of the size of company that is eligible for maximum relief

Research and development tax relief, introduced in 2000, is a component of the government?s strategy to improve productivity across the UK.

From 1 August 2008 the size of a company that qualifies as a small or medium-sized enterprise (SME) for R&D tax relief purposes doubled and the rate of relief available to SMEs has risen from 150% to 175%.

?The changes in rates of relief mean many companies previously claiming at the 125% large company rate could benefit from enhanced R&D deductions at 175% under the new SME regime. The result is a tax saving of 21% on qualifying expenditure compared to 7.5% under the previous large company regime ? almost triple the rate,? says PricewaterhouseCoopers R&D specialist, Lesley Hill.

For loss making SMEs, the company may elect to surrender losses and get cash back at a rate of 24.5%. According to Ms Hill, industries typically claiming R&D relief include software, high tech electronics, life sciences, aerospace and pharmaceutical industries. Less obvious industries eligible for relief include retail, manufacturing, financial services, automotive, oil and gas, engineering, and food and beverages.

?Many companies fail to identify any or all of their qualifying activities. Application of the definition extends well beyond the traditional areas of research. You do not have be doing research in a lab and wearing a white coat to qualify,? comments Ms Hill.

R&D relief is available on improving existing technologies, developing new applications or turning something that is already established as scientifically feasible into a cost-effective, reliable and reproducible process or product.

PricewaterhouseCoopers LLP has seen the pace of change in science and technology having an effect on most companies. In order to remain competitive, companies usually have to invest in research and development to keep a step ahead. The increasing focus on energy efficiency is impacting on many sectors. Developing a cheaper, faster or more energy efficient product or process may qualify for UK R&D tax relief.

The fast moving consumer goods industry also spends significant amounts on R&D; from genetically modified (GM) foods to packaging. Eligible R&D activity includes improvements or alterations to packaging for different cooking or storage methods, such as extended shelf life, lower fat or reduced cholesterol versions of existing products.

Ms Hill comments: ?Interestingly, many R&D claims for engineering process improvements and appreciable improvements to existing products go unclaimed because companies think they have to be developing something from scratch in order to qualify. The next generation version of a computer game, or combining different technologies into one system for the first time, may be eligible R&D activities for UK tax purposes.?

The process of making a claim can be fast and efficient. The UK tax authorities have set up R&D specialist units to administer the regime and since their introduction in 2006. ?We have found that claims can be prepared and agreed quickly, minimising any distraction from the companies? core activities.?

While UK R&D tax relief provides a valuable source of funding for many companies, it is important that an evaluation of other incentives is done when investing in the UK. There are a number of UK and European grants that companies may benefit from, and their effect on R&D tax relief is important to consider. Multinational companies will also want to ensure that they structure their R&D operations to make the most of R&D tax relief available around the globe. However, what is for certain is that many companies are currently benefiting from claiming UK R&D tax relief and will continue to do so in the future.

Lesley Hill is the Network Leader for
research and development at accounting firm
PricewaterhouseCoopers LLP.
Lesley Hill
+44 (0) 1895 522 119
E-mail:
Website: www.pwc.co.uk