We are delighted to be back with the next episode of the FI Group podcast. This time around we talk about R&D tax credits internationally and hear from Leon Archie from FI Group UK, Francisco Barquero from FI Group Spain and Andrea Luigi Guerra from FI Group Italy.
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And if you don’t have time to listen but would love a long read, then here is the transcript of the latest episode so you don’t miss out on a thing.
Hello, and welcome to a podcast series brought to you by the FI Group. In today’s episode, we are going to be looking at the FI Group’s international presence, and get a better understanding of the support that we provide to our clients globally. As I’ve mentioned in episode one, I am the Business Development Manager here in the UK. The FI Group has been in the UK for four years, there have been lots of highs and lows, more highs I’m happy to say, and I’m looking forward to seeing what the next four years has in store for us.
The business has gone amazingly with all of the hard work of our FI UK employees, past and present. We have also had great help from our international team in terms of recommendations and knowledge in emerging technologies. We have also launched new services, such as My R&D Claim, which helps provide Start Ups with a cost-effective option to claim for R&D tax in the UK. Research and development tax credits are a UK tax incentive designed to encourage companies to invest in innovation. R&D tax credits can provide valuable funding for any companies spending money on developing new products, processes, or improving existing ones.
How does it work? Well companies can reduce their corporation tax bill. If they are a profit-making company, if they are loss making company, they receive a cash benefit. No matter the sector, if you’re spending money on research and development, then you could be eligible to claim R&D tax credits in the UK.
Well, we work with a lot of companies that are based abroad but operate in the UK. One of the many benefits of working for an international company is that we have members of staff that speak multiple languages. As long as your company is regulated as a limited company in the UK and undertaking qualifying research and development activities, you can claim for R&D tax credits. I do stress that if you are unsure, whether you’re eligible, please get in touch. FI Group as a whole inspires teamwork across all countries, it is great that we have these open channels to share ideas and expand on knowledge that we have across the group. Visits to our international offices are very much encouraged, which gives us a firsthand view of how our colleagues work in the different countries that we are present.
Like all countries around the world, we’ve had to adapt to the new working norm, which is working from home, having external and internal meetings via zoom or teams. But I think we have done extremely well considering the circumstances and it’s great to have such a supportive team in the UK and internationally. My one message would be to please get in touch with us right now, no matter if you’re a large company or a startup, I would say, get in touch and we can clue you up on everything R&D in the UK and internationally. But also, if you’re already claiming, you should get in touch as we offer a free health check, if you will, and review your previous claims to see if there are any hidden eligible expenditure that has been missed. With Covid having a negative impact on businesses around the world, R&D tax credits are a fantastic way to get some money back into your business.
A massive benefit of the R&D tax game is the fact that any business in any sector or industry is welcome to apply. As long as the company is UK based and registered to pay corporation tax, then its innovation activities are likely to qualify. The whole point is that research and development activities undertaken have the aim of attempting to resolve a specific technological or scientific uncertainty. You can claim for direct staffing costs like employers, salaries, national insurance numbers, consumables used during the R&D process, software, contributions to independent research and externally provided workers and subcontractors. It can be really stressful to figure out which costs you can and can’t use. This is why we extremely recommend speaking to us so that your application is right the first time, as any mistakes can lead to extremely stressful and not to mention expensive costs.
There’s no minimum amount which companies need to spend to qualify R&D projects to be able to claim R&D tax credits in the UK, which is great news for startups and small businesses as you will be rewarded for your contribution to innovation. We have developed a tailored personal approach for each client regardless of the size of the company, and this is based on the 20 years of experience, writing R&D tax reports for some of the hottest startups and largest companies in the world. We have our in-depth knowledge of the R&D tax scheme in the UK. We have had no enquiries issued against our claims, which is something that we are really proud of and hope to continue in the future.
If you are currently writing R&D tax reports in house, we know that this can be quite time consuming. We are here to lift that burden and allow you to focus on the core of your business needs. We try our best to have one of our industry experts working on your claim, which means we employ the best technical scientists and engineers in the business. And finally, there is no downside to working with us as our clients will only be charged if the claim is successful and based on our hundred percent success rate, it’s a no brainer. So, open your laptop or pick up your phone and get in touch.
FI Group is a Spanish company that has been consistently expanding over the past 20 years. Francisco Barquero is here to explain how the FI Group in Spain operates on a much larger scale.
My name is Fran Barquero. I’m a chemical engineer and I’m currently the International Marketing Director at FI Group. I’m based at the FI Group’s headquarters in Barcelona. I like to define myself as a one-man club, since 90% of my professional career has developed at FI Group and I expect to continue in the company for a long time.
Well I started my career in FI Group 16 years ago as a Junior Consultant for chemical and energy sectors clients. When I started FI Group was only a small office in Barcelona with 10 employees, no subsidiaries, no international matters. I would say we were light and fast as a startup company. Since then, I’ve been in many different roles in the company, from the Technical Manager, leading a team of consultants to act like a kind of Technical Advisor of the business leader in Spain.
FI Group began its activity in July 2000. We are now celebrating our 20th anniversary. The founders Frederick and Javier had previous experience in R&D funding management in France in the late nineties that they brought to Spain through a French client that was also present in Spain. Since the beginning the purpose of the company has been to be a partner of our clients in terms of R&D funding. To do that in the first years, we focused on the R&D tax credit as a core service. Through the years we have improved our R&D services portfolio with different technical support to our clients, in terms of funding.
We closed my first year in the company, 2004 with a turnover of a two and a half million Euro. This year 2020 in Spain, we have reached 40 million euros. So, it’s a spectacular growth in only 16 years. If we look at the organic growth in Spain, we have grown from 250 employees in 2015 to more than 500 in 2020. Globally we will reach 1,300 employees at the end of the year. Everything is happening very fast. It’s a great talent for us to manage this growth, but it’s also a great opportunity to think constantly about the structure and try to generate new roles that can provide excellence and an added value to our clients. Finally, we are the company leader in almost every market where we are present, and this is a serious responsibility for us.
Well, the R&D tax credit was implanted in Spain in the year 1996, since then, the incentive has been improved on year by year. Of course, we had a complicated situation in 2006 because the Spanish government had planned to eliminate the R&D tax credit. But finally, the only consequence was a reduction of it. I will say we have the most secured incentive across Europe, since it’s most of the cases our clients need the validation coming from the Spanish government. This process adds at a lot of red tape, to our tasks. But then on the other hand makes the Spanish system very safe in terms of further tax audits.
There are a lot of exciting companies in Spain trying to innovate and to develop breakthrough ideas, mostly in the services sectors. To give you an example, I can mention Global as a successful startup company. Global is dedicated to the purchase, collection, and shipment of orders in less than an hour through in depth, and then delivers, and known as ‘Globers’. So, you can imagine its growth during the lockdown, but we also have, of course, the big Corporates, whose innovation efforts are very important to sustain Spanish economy in these times of crisis. This Company’s contribution is very necessary to move the Spanish economy from tourism to technology. A good example of these would be Banco Santander there, or Iberdrola, very active in the development of new technologies and in the funding support to small companies with great ideas. There’s a lot of changes in our structure and relation between countries due to our constant growth. For example, we have created a lot of cross roles inside the company wanting to share, the know-how. Our core service in all the countries, what we are implanted is the R&D tax credit. So, we think there’s a lot of knowledge to share between us, considering obviously the differences in every country’s regulations. We also have invested a lot in tools and developing our own technology. So, we can now collaborate from Spain, with all the countries in the group without moving.
This is a critical point to succeed in international projects, especially in Covid times. I would say we are leaders in R&D tax credit Management in Spain, especially since the government has published the ranking of Consulting Firms in Spain, and we are at the top. I will also add the fact that we are a very dynamic organization with financial solvency and the ability to manage all the R&D funding process end to end. Finally, our aim is to be a partner for our clients, joining them in their R&D projects, uh, from the creation of the idea to the commercialization of tools, solutions, and products. And of course, we have the best team.
FI Group in Italy is also a great market like the FI Group in the UK. Here is Andrea Luigi Guerra explaining how the Italian side of the business works.
Hi, my name is Andrea, and I am the Business Developer Director for the Italian branch of FI Group. I am passionate about innovation and technology. And as I am in Italy, I also like a lot football! I like to travel a lot too, and I really love my job. It is very exciting to develop a new country inside an international group, like FI. I have been working for FI Group for almost a year and a half now, and I hope to stay there a little bit more. FI Group in Italy is almost the same age as me. We open in 2018 and we are starting together the first year of activity. In Italy with steady progression, we double our revenues each year, and we plan to continue with the same space for the next years.
Italy change frequently R&D tax incentives, because the political situation had changed quite frequently too, during this last year. The incentive is the form of tax credit. Until 2019 the model was based on a reduction between the Data, the fiscal year of reference, and they have average value of the R&D expenses of course, of their three years, 2012, 2013, and 2014. From fiscal year 2020, the calculation is based only on the R&D expenses of the fiscal year of reference. So, it’s no more than incremental R&D incentives, but it’s a volumetric one. Moreover, it’s important to say that in 2020, it has also been added an innovation tax credit and a design tax credit. So, I understand that the matter is quite complex. So, feel free to contact us for further information.
A lot of companies in Italy, perform R&D and consequently benefit from R&D tax credit. What we witness is that the definition of R&D created some misunderstanding among companies. So, it is important to refer to the first Scotty manual, which we translate to those Italian to determine if a company performs errand D or not.
Well, we are an international company, so we work internationally by DNA. It’s normal to interact with our foreign colleagues on, for example, international clients, European projects, marketing campaign, global tender, and also to share a best practice to assure the same quality of flavor, everywhere. And finally, we also share our annual meeting where, which is the best occasion to meet our international friends. If a company, which is based abroad operates in Italy, it can do for example, by having a branch in Italy. So, if the Italian branch of this international company, performs R&D tax credits that activities, the branch can benefit in Italy from the R&D tax credit.
Otherwise, another possible configuration is that an international company operates in Italy by subcontracting R&D activities. In this case, the company can benefit from R&D incentives in their home country. Italy was one of the first European country to be affected from COVID. So we serve a little bit as a forerunner for the group. We implemented working for the safety of our employees, and of our client. And I have to say that February, March, and there were quite harsh. A lot of companies stopped, and everything was closed. Now we are witnessing the restart of a lot of activities. And so, we are very happy to be there to support company in this restarting process. As Douglas Adams will say, do not panic. So, this is the moment where creativity and innovation are the key to survive the Covid crisis.
Of course, there is a lot of incentives now. We are there to help companies benefit from them. Just let me say one thing more, independently from whom you work with, just be sure to choose a serious service provider because R&D and innovation incentives are a serious matter. FI Group is a world known service provider in R&D, tax incentives. So, we have a history behind us, talking for us. In Italy, particularly, even if we are young, we are the only one that translated the manual in Italian. So, we have a deep knowledge of the low. Moreover, we work only on a fee model. So if the client does not the benefit, we are not paid. And finally, we defend that our declaration for, five years, after then, we guarantee that we do not have any hidden cost or penalties. So, what you get, you pay us.
That’s it for this week’s episode. I hope it helps you get a better understanding of how we operate as a business, and what we offer to our clients in terms of support. If you like this episode, subscribe, so that you don’t miss out on future episodes. To find out how we can support you, head to FI-group.com for more information. I’ll be back in two weeks’ time. Thanks for listening.
If you are looking to chat about whether your company can claim R&D tax credits then get in touch with our friendly team today.