If innovation is at the heart of your business, chances are you carry out research and development projects.
Whether this is focused on products, services, systems or software, you can apply for R&D Tax Credits.
Why do R&D Tax Credits exist?
The reason behind the scheme is the government’s mission to encourage UK businesses to push the boundaries and further improve the nation’s reputation for creating new products and services.
How do I qualify for R&D Tax Credits?
The idea is that when a company invests time, money and effort into enhancing its industry, it deserves to be rewarded financially.
Providing you can present evidence of investing in research and development, you qualify for this specific form of tax relief.
The work carried out needs to be legitimate R&D, so it’s crucial that you can prove the process began without a clear outcome being known. Even if the research and development carried out was a failure or resulted in a different conclusion than desired, it still counts as R&D. The scheme applies to all types of businesses in any industry and many forms of relevant projects can be claimed against.
How much can I claim in R&D Tax Credits?
Businesses that are eligible for R&D Tax Credits can claim up to 33% of their related expenses. This is a significant proportion for any size of project, so whether you’re a start-up that recently spent a few hundred pounds or an established company that’s constantly exploring new areas, it’s definitely worth claiming back as much as you can.
When HMRC has decided on how much your business can claim back through R&D Tax Credits, the amount will be recovered either as a cash payment or in the form of a Corporation Tax reduction. Either way, it’s more money in your bank account and a stronger cash flow for your business.
The benefits of R&D Tax Credits
The most obvious advantage of claiming this relief is the money that you receive. However, there are other benefits that come from claiming R&D Tax Credits through your business:
You can accomplish more with a smaller budget
Your cash flow is given more breathing room
There’s no threshold, so you can claim against R&D projects of any budget
You can even claim them if the R&D project is running at a loss or fails to bring the desired results
The money you receive can be invested into any area of your operations, from recruitment and marketing to additional R&D activity or even staff bonuses
Get in touch
R&D Tax Credits are a fantastic incentive to expand your research and development processes. To find out more, call our Northern office on 01482 235575 or our London office on 0207 885 0605. Alternatively, you can fill in our contact form and one of our specialists will get back to you right away.