Our Head of VAT, David McGeachy, reveals some surprising intel and rules around VAT which may very well be the ...
R&D Tax Credits Claim now
31 March 2020
Since the launch of the Research & Development (R&D) tax incentives, way back in 2001, more than £10 billion has been claimed as tax relief. Even in the most recent year, the cash paid out to support R&D across the country has doubled, and will continue to grow year on year.
With COVID-19 continuing to disrupt all businesses, identifying and claiming the full potential of R&D tax relief is becoming ever more important. It could help businesses with a much needed cash boost to keep going, offering a life line for businesses during this period of uncertainty.
Do you know about R&D tax credits?
An overwhelming majority of business owners still don’t know what R&D tax credits are or believe they don’t qualify. The R&D Tax Reliefs have been around for almost 20 years now, and re-designed to encourage investment in innovation and development. But, don’t worry, it doesn’t have to be a huge scientific or technological breakthrough!
Businesses that spend money on developing a new process, product or service either internally or for a customer, could qualify. If you employ people who work on projects that seek to advance knowledge and resolve uncertainty, again, you could qualify.
Many business owners still believe their company won’t qualify for R&D tax credits. In many cases, that misconception is simply wrong and is costing business owners, tens or even hundreds of thousands of pounds annually. HMRC estimates that over 80% of eligible companies are missing out. Could this be you?
So, what is R&D, and do I qualify?
In short, R&D tax credits are a UK tax incentive designed to encourage companies to invest in R&D. Companies are able to reduce their tax bill or claim payable cash credits as a portion of their R&D expenditure.
Ask yourself the following questions:
- Am I seeking to achieve an advance in science or technology?
- Is my work or project;
- subject to scientific or technological uncertainty?
- not readily deducible by a competent professional – (someone with an industry related qualification and/or significant industry experience?)
- Are there costs which could potentially be eligible, these include; staff costs, consumables, software, subcontractors and heat and light?
Don’t let the talk of science and technology put you off, this isn’t aimed purely at people in lab coats and top secret government research centres. We work with companies in a variety of sectors including food and drink, civil engineering, architects, consultancy, IT, manufacturing and many, many more. The fact is, over 80% of eligible UK SMEs are yet to claim R&D tax credits.
So what next?
Before you say;
- Is it worth it?
- I don’t have the time.
- I’m still not sure if this even applies to me.
- My accountant says I don’t qualify.
Speak to our R&D team to find out more and if it could be worth an initial fact-finding meeting or telephone call. Don’t forget we can only go back two years so the sooner you get started the better off you could be!
Why should I bother?
The claim could potentially provide your company with a cash injection, enabling you to keep your business going through difficult times. The average tax refund made by small and medium enterprises in the UK is £53,876 (2016-17). It sounds too good to be true doesn’t it? The government gives small and medium UK businesses up to 33p per £1 spent on R&D.
How Fortus can help
We’ll get to know the mechanics of your business, and uncover the full extent of the R&D your business undertakes. Our team are professionals from a wide range of technical and scientific backgrounds; including IT specialists, engineers, composites and special materials experts, manufacturing and the built environment.
We use our considerable experience to ensure that your claim is robust, you receive the maximum entitlement and the process is hassle free.
At Fortus, we know you have a business to run too, so we’ve perfected a streamlined and effective process – which allows you to continue doing what you do best, while we make the claim for you.
How much would this process cost me?
The fees for R&D claims are usually calculated on an agreed percentage of the benefit you receive so you’ll only have to pay your fee once you’ve received your money.
Along the way, we’ll also notify you if we think there’s another way we can help your business grow, using one or more of our various service lines which range from audit to accounts, all the way to more diverse specialist services such as property and people services. We make it our business to understand what you want from your business.
Our aim’s to ensure you receive the advice you need, when you need it. We’d welcome the opportunity to work alongside you, improving or perfecting your processes, making sure you’re able to focus on what’s important – your business.