Tax Advisory Services
The highly experienced tax experts at FTI Consulting leverage our deep understanding of Life Sciences to provide a level of service beyond that available from accounting firms. We work closely with our clients to provide the highest quality tax advisory services that are client centric and focused on mitigating tax-risk and minimising cost.
Our Service Offerings
Tax Compliance – BioScience Proforma
FTI Consulting is the first firm to challenge long standing conventions for tax compliance.
We have developed a proforma BioScience tax computation, which has been presented to HMRC. This process has been designed to cut out several unnecessary steps and, at the same time, significantly improve the quality of the information that is presented.
As a result, we are able to reduce the cost of our tax compliance services by 35%. For a typical research company we expect to complete the tax compliance and the R&D tax credit claim, with a detailed review of costs, for around £2,500-£3,000. The principal area of focus remains the R&D tax credit and our procedures ensure that this is optimised.
Put simply, our unique process enables us to:
- Reduce cost and time
- Improve disclosure
- Focus on the inputs to the R&D claim and ensure qualifying costs are correctly identified as they are incurred
- Pre-empt HMRC concerns
Research & Development Incentives
The life sciences tax team at FTI Consulting has had many recent successes in enhancing historic R&D tax claims, having successfully negotiated the treatment of expenditure in the pre-clinical and clinical supply chain. We are the only firm taking these points to HMRC. In more than 70% of cases, where companies are being advised by the major accounting firms, we are enhancing the qualifying cost base for historic claims and, importantly, setting an enhanced precedent for future periods.
Claims are approved by HMRC with full disclosure, the result of our applying a more forensic review of costs, mapping these to qualifying expense categories and understanding the level of evidence needed to support the claim.
Our depth of experience in BioScience licensing is unrivalled. FTI Consulting has adopted a defined and proactive approach for identifying and addressing key areas of tax sensitivity for a proposed license. Following a brief review of the key components of the transaction at Heads of Terms, our objective is to rule out a number of potential issues allowing focus to be applied to key aspects and at a point when negotiations are more fluid.
This defined approach ensures:
- Cost efficiency
- Best practice
- A greater level of assurance that key aspects will not be overlooked
- We restructured the license to a collaboration with an option that saved US$50m tax on a US$350m deal.
- We recommended a different basis of FTE reimbursement in a collaboration that saved circa £1m in R&D incentives.
- We were an expert witness about including indirect tax in a royalty clause, resulting in a settlement of US$25m.
- We advised on a positive HMRC clarification of a substantial option fee as qualifying income for the Patent Box.
FTI Consulting provides unrivalled transfer pricing services, thanks to our deep industry knowledge and the transfer pricing skills of over 120 first-class economists, accountants and valuation specialists. Our tax team is uniquely positioned to address intellectual property challenges. Also, we are part of the fifth largest international tax network of highly respected transfer pricing and international tax professionals. Our experts use econometrics and benchmark analyses to develop robust valuations of IP assets to our clients for use in establishing transfer prices and to assist in establishing licensing/royalty rates and sales values for IP assets.