Research & Development expenditure relief – R&D for the SME…are you missing a trick?
Contrary to popular belief R&D is not just reserved for the likes of Mr Dyson, other ‘Large’ corporations or mad professors in laboratories!!
The Government really wants to encourage companies to invest in R&D and so there have been generous additional tax reliefs available to SMEs since 2000 and this is because the UK believes it is advantageous to the UK economy.
The relief is given as an enhancement amounting to a further 130% of qualifying R&D costs incurred …….that is huge!
If your company is profit making this can significantly reduce your tax bill but better still if the company is loss making, (which is not uncommon when developing a product as very often a company will as yet not have any other income source), there is scope to make a claim for a repayable Tax Credit. This can bring a vital boost to cash flow allowing a company to complete a project.
How do you know if the activities you are engaged in qualify for this relief?
The R&D must meet HMRC’s rather detailed criteria. In short, a project qualifies if it constitutes an “advance” in science and technology, and that’s defined as an improvement in overall knowledge and capability in a technical field.
The types of qualifying projects can be varied from complex software development to developing children’s toys or even developing a new flavour combination and method of coating your favourite breaktime snack.
If you believe that your company may be involved in potentially qualifying activities get in touch and we will be happy to review your project and if qualifying, assist you with making a claim.