Investment in Research & Development is key to economic success and the government has introduced a number of incentives to support businesses that innovate, create and invent. At RfM, we share this view, and are committed to helping eligible clients offset the cost of R&D activity with additional reliefs and R&D tax credits.
In the Autumn Budget 2018, the government pledged a package of additional measures designed to encourage more SMEs to invest in R&D, including a campaign to raise awareness of R&D tax credits. If you haven’t yet been made aware of the benefit of R&D tax credits and reliefs, here’s what you need to know:
- Companies can claim additional relief of up to 130% on qualifying R&D expenditure. This is in addition to the actual expenditure (i.e. a 230% total deduction).
- A company can claim enhanced deductions against taxable profits for all qualifying R&D expenditure – including labour, equipment, materials and possibly a share of some overheads.
- An R&D tax credit is also payable to companies not in profit. In such cases, the company can choose to surrender a loss for a cash repayment.
- The incentives are only available to companies, not individuals.
- As part of our Business Consulting service we can assist you in preparing your claim. This includes assessing whether your activities qualify as R&D and the preparation of a comprehensive technical report to substantiate the claim.
Helping clients to secure valuable R&D tax credits
In recent months, Tony Backhouse, Director of RfM Business Consulting, has successfully helped a number of RfM clients to benefit from enhanced tax reliefs and receive a cash sum. These sums have ranged from £5k to £30k. The types of businesses that can claim are wide and varied and not just technology firms as is commonly believed. Clients Tony has acted for include the following:
- An architectural consultancy
- A craft brewery
- A chemical manufacturer
- A fine dining restaurant
- A bistro pub chain
- A childcare provider
- A cheese maker
- Three Software companies
“R&D tax credits are a fantastic initiative for companies that are investing time and money in developing new products and processes,” explains Tony. “A business can effectively offset all the costs associated with the R&D activity against their tax bill – and also receive a lump sum as well.
The problem is that some businesses don’t even realise that the tasks they are carrying out actually qualify as research & development. You don’t necessarily have to be developing a new product; it might be that your R&D activity results in the modification – and subsequent improvement – of an existing product, service or process. We work together with the business to identify where R&D activity has occurred.
We then pull together all the evidence and prepare a full technical report so that the application is solid.”
If you are unsure whether you are carrying out R&D activity or would like to discuss making a claim for R&D tax relief and credits, please get in touch. Ask your advisor for a referral to our Business Consulting service, email Tony Backhouse directly at firstname.lastname@example.org or call 07969 900864.
Read our comprehensive fact sheet on R&D tax incentives here.
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