United Kingdom (U.K.) Research and Development Incentives

6 Months Ended

Jun. 30, 2018

Other Income and Expenses [Abstract]

United Kingdom (U.K.) Research and Development Incentives

United Kingdom (U.K.) Research and Development Incentives

The Company carries out extensive research and development activities that benefit from the U.K.’s small and medium-sized enterprise (“SME”) research and development tax credit regime, whereby the Company may either receive an enhanced U.K. tax deduction on its eligible research and development activities or, when an SME entity is in a net operating loss position, elect to surrender net operating losses that arise from its eligible research and development activities in exchange for a cash payment from the U.K. tax authorities. These refundable cash credits, which may be received without regard to actual tax liability, are not subject to accounting for income taxes and have been recorded as a component of other income.

As of December 31, 2017, the Company had filed a claim as an SME for a $3.0 million refundable cash credit for its 2015 tax year for qualifying research and development activities incurred in that year. The claim was accrued for as a receivable within other current assets at June 30, 2018 based on communication from the U.K. tax authorities in June 2018 and subsequent receipt of the cash in July 2018. The Company has not filed claims for any refundable cash credit for its 2016 or 2017 tax years, nor has it recorded any balances related to claims for these years or for the 2018 tax year, as collectability is deemed not probable or reasonably assured.