R&D Tax Credits Review For Your Cash Flow
Research and development (R&D) tax credits are a government incentive designed to reward UK companies for investing in innovation.
R&D Tax Credits Overview
What is Research & Development tax relief?
Research and Development (R&D) tax relief is awarded to businesses that invest in innovation. This innovation can be in the form of developing new systems, processes, products, materials, devices, or any changes to the way your business works.
The chances are your business is doing R&D without even realising – it’s not just for people in white lab coats!
Our team are experts in R&D legislation. We will determine if your activities are eligible for tax relief and if so, we’ll get you the best possible return.
Do I Qualify?
You would be surprised by what is eligible for R&D tax relief – it’s not just for people in white lab coats.
How Do I Claim Research and Development Tax Credits?
The process of making a claim for Research and Development costs can be divided into imperative stages and generally isn’t something you will be able to do yourself. Due the intricacies involved in the area of definitions, taxation and compliance it is advised to appoint a specialist Research an Development company to undertake the work.
Is This A Tax Scam?
No this is absolutely not a tax scam or some clever scheme that gets around the rules. This is a tax relief available to all Limited company in the United Kingdom. However, a claim can only be made when there has been qualifying activity.
Do I Qualify?
You would be surprised by what is eligible for R&D tax relief – it’s not just for people in white lab coats. Scientific research is eligible, but so are activities such as:
- Software Development
- Failed & Successful Projects
- Development of Innovative Recipes
- Development of Innovative Formulas
- Development of New Materials
- Improved Processes
- Development of New & Improved Products
- Development of Environmental Products
Essentially anything that helps you gain a competitive advantage in a new and innovative way could be eligible for tax relief.
The tax laws around R&D tax relief are complicated, and the criteria for eligibility can be ambiguous. In order to get the largest tax relief return, you need to have an expert on your side. Our R&D team only do R&D, meaning you’ll be guided by the best in the business.
There’s no risk attached, and the initial assessment will only take around thirty minutes of your time. We’ll thoroughly assess you and if we can’t see an opportunity for you to claim R&D tax relief, you walk away without spending a penny.
What can I Claim?
You can claim all sorts of costs, just some examples are:-
- Staff costs – gross pay, employer NIC, employer pension
- Externally provided workers
- Materials consumed
- Heating, lighting and water
- Payments to clinical trial volunteers
Every claim is different but there is scope for even a medium sized business to receive a large payment.
How Much Can I Claim?
Every company is different but here are some recent successes from our partners: –
- Health & Social Care Software – £117,406.23
- Client Ordering App – £70,561.47
- Metal Fabrication – £64,213
- Parent portal / IT Systems – £40,047
- Technology Company / App – £28,371
- Test Chambers manufacturer -£19,492
- Training Provider & Consultancy – £12,603
Our R & D Tax Advisors tell us that their average client receives £39,000 as a result of submitting a claim.
Here are some more detailed examples: –
Spring Manufacturer – £34,000
This company has been trading for over 30 years and makes many different designs of springs for their clients.
Every month this company will receive over twenty different requests for springs. Some of these requests may involve the use of new types of materials, different tension strength specifications. This company will most likely be competing with a competitor for the business and has to focus on the cost of staff, improving processes, new materials to make sure they are competitive and can get the business. The company changes the heating process and spends time, utilities and raw materials in testing and improving the process. This activity would qualify as Research and Development.
Oil Processing Plant – £296,000
This company had been trading for over fifty years and processed contaminated Lubricants and Oil sludge waste from industrial businesses.
This business spent considerable amounts of time and resources on developing new processes of filtration and new approaches to assist in meeting the legislation protocols set out by the Environmental Agency. This resulted in the quality of the water used within the filtration processes being cleaner than when it was taken from the water mains.
Business Service Provider – £73,000
This company provides financial services to businesses and Individuals and has been trading for over six years. This company had attempted to identify a software platform to assist in the management of clients and internal processes of the services they provided.
Unfortunately, there was no ‘off the shelf’ product available to suit their needs. The company decided to customize Microsoft SharePoint to improve efficiency in the way their business operated. During the development phase they instructed a third party software development company to develop the new infrastructure. During this phase several staff members including some of the director were involved in the initial search, planning and development of this platform. The time and salary costs (including pension contributions, but not dividends) as qualifying costs and were apportioned accordingly
How Do I Claim Research and Development Tax Credits?
The process of making a claim for Research and Development costs can be divided into imperative stages and generally isn’t something you will be able to do yourself. Due the intricacies involved in the area of definitions, taxation and compliance it is advised to appoint a specialist Research an Development company to undertake the work. A specialist research and development company will usually complete the following steps:-
Step 1 Due Diligence
Ensure there has been justification of R&D activity taking place and that there has not been any costs already claimed on before. Financial and technical information is collated to establish qualifying areas
Step 2 Project Audit
A technical manager, who will identify qualifying projects visits the business. Interviews with Directors and key staff will take place to identify projects, which had technical uncertainty and establish the progression or outcomes.
Step 3 Project Analysis
Activity/Projects identified have to broken down and rebuilt in to the format of reporting that HMRC prefer to work with.
Step 4 Technical Justification
This is key, based on the definitions and legislation, there has to be adequate justification of the business activity qualifying as research and development. Understanding how HMRC would prefer to see this information is a reason to use a specialist in Research & Development Tax Credits.
Step 5 Financial Analysis
The ‘leap of faith’ needs to be accounted for this is about correctly apportioning a figure based on activity levels and HMRC guidance on justifiable expenditure.
Is This A Tax Scam?
No this is absolutely not a tax scam or some clever scheme that gets around the rules. This is a tax relief available to all Limited company in the United Kingdom. However, a claim can only be made when there has been qualifying activity. Research and Development definitions have been available through accounting practices since the 1970’s.
It was since 2000 where accelerated costs for SME businesses were brought up to date with the rest of Europe. Please speak to your advisor and ask for their advise on making a claim. If you are still unsure or require more information, contact a specialist research and development company to find out if you can make a claim.
How Do I Get Started?
We are happy to be able to offer you a FREE R & D Tax Credits audit.
The first part of the audit is an online questionnaire for you to fill in, it will take less than five minutes and then we will let you know if you are a qualifying Business. The second part of the audit is a 20 min phone call with one of our R & D Experts to identify the projects that you have undertaken that contain R & D. At the end of this call we will give you an indication of how much you might be able to claim.
Find the Best R & D Tax Credits
Review Your Cashflow with R & D Tax Credits
Exciting Futures was created as an all-in-one solution by bringing together the tools or service including R&D Tax Credits for cashflow you may review to run your business! When your business model is mapped out, cashflow is a massive part of your day to day business R&D Tax Credits may be one of the overall cash flow importance needed to review t& streamline costs further
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