UK's R&D Tax Relief Scheme

12 Months Ended

Dec. 31, 2021

Other Income and Expenses [Abstract]

UK's R&D Tax Relief Scheme

U.K.’s R&D Tax Relief Scheme

We conduct extensive research and development activities that benefit from U.K.’s small and medium-sized enterprises (SMEs) R&D tax relief scheme. Under this tax relief scheme, a SME can make an election (i) to receive an enhanced U.K. tax deduction on its eligible R&D activities or, when an SME entity is in a net operating loss position, or (ii) to surrender net operating losses that arise from its eligible R&D activities in exchange for a cash payment from the U.K. tax authorities. There is two-year window after the end of a tax year to seek relief under this scheme. As the tax incentives may be received without regard to an entity’s actual tax liability, they are not subject to accounting for income taxes. Amounts recognized by us for cash payment claims under the SME R&D tax relief scheme are recorded as a component of other income after an election for tax relief has been made by submitting a claim for a discrete tax year and collectability is deemed probable and reasonably assured.

In December 2019, we elected to surrender net operating losses by submitting claims to receive cash payments of $9.9 million and $9.8 million related to our 2017 and 2018 tax years, respectively. For the year ended December 31, 2020, we recognized income and collected cash of $19.7 million upon approval of our submitted claims by the U.K. tax authorities as a component of other income, net on the consolidated statement of operations. In December 2021, we submitted a claim for $12.4 million related to eligible R&D activities incurred in our 2019 tax year and the amount was recognized as other income for the year ended December 31, 2021. As of December 31, 2021, a $12.4 million receivable was recorded within other current assets on the consolidated balance sheets. For our 2020 tax year, we have not yet decided whether to seek tax relief by surrendering some of our losses for a tax credit cash rebate claim or electing to receive enhanced U.K. tax deductions on our eligible R&D activities.