Successful businesses function by reducing costs and driving innovation, especially in the current period of economic turbulence. So why do so few businesses opt to minimise their payable tax for R&D, and if applicable secure a tax repayment?
Accountancy In Europe and our advisory team have a proven track record in helping UK businesses make successful R&D tax relief claims. Our collective insight on the processes and pitfalls behind tax credit applications can save small and large companies money, no matter what the industry.
If your business designates people, money and time to activities which further progress and development in your field, then you could be eligible for R&D tax credits.
WHAT IS R&D TAX RELIEF?
When it comes to saving on tax, R&D tax relief is the government’s most accommodating provision. The reason for this is straightforward: businesses that invest in R&D tend to apply that research to new projects. New projects often create new jobs, and those businesses put more back into the Exchequer in return.
Encouraging businesses to invest in innovation doesn’t just foster more creative projects; it also stands to attract the kinds of business that would most appreciate that R&D investment. Building an ecosystem that is kind to the fields of technology and manufacturing stands to support future industry, and contribute to the UK’s long-term success and cachet.
Moreover, the R&D tax credit scheme has been significantly improved since its inception. There has never been a better time to claim, and we can help you navigate the process.
HOW CAN IT HELP YOU?
R&D tax relief is available to all eligible companies, but its nature depends on your business circumstances. If you’re making a profit and therefore paying corporation tax, the rate of this tax can be lowered.
- If you are not making a profit, relief can be received as a payable cash credit
- If your SME is making a profit, this constitutes up to £26 relief in every £100 spent
- If you are making a loss, it is up to £33.35 in every £100
- Larger companies receive a lower (but still significant) rate of relief of up to £8.80
DOES YOUR BUSINESS QUALIFY?
The point at which tax credit claims often seem to fall down is discerning eligibility. HMRC’s explanations can be difficult to decode, and many businesses seem to give up, perhaps assuming that paying for a tax relief service would negate the benefits
According to HMRC themselves, the credit exists to help companies undertake projects that extend current industry baselines in science and technology, where the outcome is uncertain and the methods used are somewhat unquantifiable. This broad definition does not paint the clearest picture of who or what is eligible for relief.
The easiest way to self-assess a claim is to ask yourselves: have we used technology and research to formulate new tools, products or services? Have we made a tangible effort to iterate on our products using technology? Did we ever begin a project with a broad goal of improvement, but without a tangible sense of how it would be achieved?
HOW CAN YOU CLAIM?
The crucial part of a tax credit application is to highlight as much eligible research spending as you can. It follows that the more areas of R&D expenditure you can point to, the more relief you will receive from the tax authorities.
This is where we come in. By combining the services of a specialist R&D tax relief advisory firm with those of an accountant, we can manage the assessment, preparation and submission processes together. We speak your language and HMRC’s, assisting you in a process that may be unfamiliar or too time consuming to navigate.
WHY USE AN R&D ADVISORY SERVICE?
Our R&D advisory team are both experienced and diverse, including a wealth of PhD, BSc and MSc qualified scientists and engineers across numerous different sectors. The Technical Analysts are not only experts in their specialist areas, but equally knowledgeable when it comes to the specifics of legislation.
If you think you may be eligible for R&D tax relief, please get in touch and a member of the specialist R&D advisory team will be in contact. Best of all, the assessment is free. If you don’t ultimately qualify for R&D tax relief, you won’t owe anyone a penny.