Contrary to popular belief, the oil and gas industry offers many opportunities for R&D Tax Credits. Far too often, companies in this industry are unaware of their eligibility or the extent of their eligibility. R&D activities do not necessarily have to take place in traditional R&D Departments. Innovation is an integral part of the industry and efforts to stay competitive are potential opportunities for R&D tax relief. The following activities more likely than not will be eligible if carried out by a company in the oil and gas industry:
What Qualifies as Oil & Gas R&D?
- Offshore structure design with respect to: Generator and Compressor Modules, Process Modules, Quarters, Equipment Skids, Jackets & Helidecks.
- Development and Testing of Plug and Abandonment Solutions.
- Development and Testing of Turnaround and Shutdown Services.
- Fuel Combustion Testing.
- Plant Design with respect to: Pressurization, Safety, Chemical Segregation & Environmental and Pollution Control Systems.
- Wastewater Treatment Solutions.
- Refining Issues.
- Drill Design and Improvement.
- Containment Systems.
- Environmental Testing and Remediation.
Bottom Line Benefits?
If your company is carrying out R&D and considered an SME, your benefits from claiming tax credits range between £0.25p to £0.33p for every £ of R&D expenditure.
If your company is carrying out R&D and is a non-SME, the benefit you receive is an “above-the-line” tax credit, which equates to approximately £0.13p for every £ of R&D expenditure.
Whether your company is in profits or losses, cash benefits can be obtained.
These are 2 prime examples of RDP Associates (RDP) facilitating R&D claims for both an SME and a Large company:
| Oil Company in London (SME) | Gas Company in Aberdeen (Large) |
| – £6m in turnover/£300K in losses – R&D Claim 2017 – 2019 – £145K in R&D expenditures £49,000 Tax Savings | – £2 m in turnover/£1,050K in profits – R&D Claim 2016 – 2018 – £400K in R&D expenditures £52,000 Tax Savings |
How Much Time Will You Have to Commit to the R&D Claim Process?
RDP’s process is designed to advise what is eligible, carry out 98% of the R&D claim process and most importantly only request 2 to 3 thirty-minute meetings at most, as well as sample documentation requests on work that RDP deems eligible.
One of our last steps is to cost out your R&D claims after we have focused on the science and technology undertaken. We would then work with your accountants to ensure the R&D claim has been e-filed. Should an HMRC Enquiry take place, our services include defending the R&D claim(s).
Get in touch with us here for a free consultation.