Whilst many companies are spending large amounts of money on developing their IT and infrastructure, as well as creating new and innovative products, a large number are still unaware that they can reduce their tax bill or claim payable credits on a proportion of their research and development (R&D) expenditure.
A large percentage of UK businesses are not taking advantage of R&D tax relief, despite government support totalling £2 billion a year.
What is R&D tax relief?
R&D tax relief is a government sponsored scheme to support research and development to create new technology, products and services, and provide tax incentives to achieve those goals.
- 26% Tax Reduction for profitable Companies (25% for expenditure prior to 1 April 2015)
- 33% Cash Back for loss making companies
HM Revenue & Customs (HMRC) has underlined its commitment to supporting organisations involved in technical development through the R&D Tax Relief scheme.
The Small Medium Enterprises (SME) scheme was introduced in April 2000, but is not intended to subsidise purely ‘blue sky’ research. It aims to reward organisations involved in technical and scientific development with valuable cash rebates and/or tax credits.
R&D is the government’s biggest single funding support scheme in the UK and there are now calls by the UK Business Secretary for the incentives to double post-Brexit.
So why are many businesses not claiming R&D tax relief?
- Our accountant says we don’t qualify – That’s because they don’t understand it themselves and don’t want to look unknowledgeable
- I don’t work in a laboratory, so my work isn’t relevant for R&D tax credits – The majority of our claims are for some form of software development, but can encompass an enormous range of activities
- It’s too complicated to bother – At Beavis Morgan, we have a proven methodology, accepted by HMRC. We can often obtain a repayment within 6 or 8 weeks of our first meeting. Our recent best was 31 days!
- I don’t want to risk the expense of applying – Our fees are usually fully contingent on success
R&D tax relief has proved to be a major boost to British business and, with Brexit looming, it is more important than ever that companies seek ways to unlock cash from innovation to help fund research and development into the ongoing enhancement of existing products and services.
Does your business undertake research and development?
Many businesses incur costs which are not separately identified as research, because they feel it’s ‘just what we do’. There are however additional tax deductions for qualifying research and development expenditure and, whilst the rules can be complex, we have a team of experts who can maximise the value of any potential claim.
Speak to us today to set the benefits in motion. Our proven methodology offers a painless approach towards obtaining R&D Tax Credits.
To find out more, contact Steve Govey or your usual Beavis Morgan Partner.