Are you entitled to R&D Tax Credit?
Since 2000 the Government have been offering an incentive for companies carrying out research & development – it is not just linked to products, it can also apply to new operating and management systems, IT and software. If this applies to your company then you may be eligible for R&D tax relief, which can reduce your tax bill or, if you are making losses, a cash payment.
R&D tax credit supports companies that work for innovative products and processes. It is not restricted to hi-tech companies and is as applicable in SMEs as in large PLC’s. It can be claimed by a range of companies that seek to research or develop an advance in their field and can even be claimed on unsuccessful projects.
There are some restrictions, but most SMEs can apply for R&D Tax Credits provided they can prove they are seeking advances in their trade which have some uncertainty at the outset. Projects that fail are also eligible. Profitable applicants can get over 40% of their qualifying expenditure back as a credit against corporation tax. This reduces to around 30% for loss-making companies.
How can you qualify?
SME’s are often surprised at the range of activities covered by the eligibility criteria. It covers a huge number of companies and could total at 4 or 5 times the current £2billion paid out now each year.
Many may be surprised to know that any company whose intention to achieve a technological advance in a project with a reasonable amount of uncertainty, can claim – even if that project proves unsuccessful.
Whatever size or sector, if your company is taking a risk by attempting to ‘resolve scientific or technological uncertainties’ then you may be carrying out qualifying activity. The project must be related to your companies trade – either an existing one or one you plan to start up, based on the results of the R&D.
Evidence you will need in order to be eligible for R&D Tax Credit:
- Evidence of the work you have done to advance a product or process in your business…
- Evidence that there was a level of uncertainty before you started the project.
- Evidence that the solution was not known before you started the project
What can be included in your claim:
Your claim can include internal and external costs. External costs could include expert advice, testing or materials and equipment needed for the project. Internally you can include salary and overhead costs properly incurred, plus any associated materials and energy used in undertaking the trials. As every project is different it is difficult to be prescriptive – just consider this, every time you resolve a problem which had no obvious solution you are possible carrying out research and development. On average SME’s are already claiming £46,000 R&D tax relief each per year.
R&D tax credit claims, which can be applied to costs going back two financial years plus the current one.
What NDM Finance can do to help you.
This is a specialist area which not all company accountants are familiar with. They can be time-consuming to complete and have a cost. NDM will investigate the potential for a claim, manage the application, reduce the time burden on you and most importantly only get paid a fee when you receive your tax refund or credit. Typically we would have a short phone call to verify that a claim has a potential for success followed up by a short meeting to agree to a plan.
Our highly specialist team all have the expert knowledge to take control of the procedure for you. We break down the claims process so all you need to do is provide us with some details, and we will take care of the rest. There are no complicated forms to fill out, no legal language to unpick and no tax law to get your head around. Your dedicated case manager will get to know your business and will be on hand to keep you updated along the process.
This could potentially be the easiest money you will ever make.
For more information, call us on 01952 287346, Or send us an email at email@example.com