A refund of tax, cash back and lower ongoing costs
Three reasons why there has never been a more important time to claim R&D Tax
What happens during a recession? Cost reduction, sadly through lost jobs, but also in funding for Research & Development. By supporting the latter, R&D Tax Credits are designed to help UK Organisations to improve competitiveness and thus avoid job losses.
How much is the R&D Tax Credit worth?
R&D Tax relief provides a benefit of between* 7.5% and 21% of the qualifying costs associated with R&D. But because many organisations and unfortunately their tax advisers too, do not realise that because R&D in the legislative definition means attempting to overcome a technological uncertainty, the scope to claim is wider and more frequent than most people realise.
Is it worth claiming though? How much time and cost will there be?
Organisations that have not claimed could have two years worth of claims to be made, providing a tax refund of corporation tax you have already paid or in the case of SMEs potentially a one year cash back claim by surrendering enhanced losses at a rate of 24% of the costs incurred if you paid no tax in the prior year, though this is subject to a cap of the company wide PAYE and NI paid.
Assistance in preparing claims can be obtained from R&D Tax UK Limited on a contingent basis, including dealing with questions or enquiries from HMRC. So the costs will be a fraction of the benefit contact us on 01962 713733 or click the contact us button for email.
It is a common misconception that getting paid by customers to undertake the development work prevents a claim, it does not.
What types of activity qualify?
It is certainly not just blue sky research or 'bleeding edge' technology.
A Boston Matrix business cycle diagram is often used to describing products or services as Question Marks, Rising Stars and Cash Cows, which eventually will probably turn into Dogs.Few people realise that R&D Tax relief can assist in product life cycle cost reduction at all stages, a few examples are:
To discuss how to claim for technological challenges like these please call us on 01962 713733 or by email through the contact us link
But is the relief really that wide? - Some further background to R&D Tax Relief
A technology history time line would show that it is organisations who manage to free business money to continue to efficiently invest in R&D, whether for research, product development, value engineering or for process improvement that best weather the storm. It was these type of activities that R&D Tax relief is designed to support.
As you may know R&D Tax Relief was introduced in 2000 for Small and Medium Enterprises (SME) and in 2002 the Large Company Relief was added. The purpose of this relief is not just to fund blue sky research. It is to assist in all cases where a company is attempting to move their product, process or service forward by overcoming the scientific or technological challenges that are impeding improvement. Because these activities are what fuel business success. Thus the relief was designed to help alleviate one of the causes of economic recession.
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