Research and development tax credits can be hard to get to grips with, and not enough people understand what they could gain from them. British businesses are among the strongest ground-breakers and problem solvers there are, which is why the UK is ranked second in the world for innovation. It's also why RIFT R&D Tax Credits finds it heartbreaking that so many are missing out on the scheme. It's the biggest boost for business the government offers and, despite the fact that they actively want companies to claim it, word just isn't getting out quickly or widely enough.
What Are R&D Tax Credits?
Simply put, the R&D Tax Credits scheme is designed to reward businesses for solving problems and sharing their solutions so everyone benefits. Whenever you spend money on a project that qualifies, you get cash reward or a reduction in the amount of Corporation Tax you're paying. If you're a small or medium-sized enterprise (SME), then that reduction stacks up to 230% of your qualifying costs!
How Do R&D Tax Credits Work?
There's a lot of maths involved, naturally, but in practical terms the scheme means you could be seeing a return of up to 26% of your qualifying costs. Here's what you need to know right now:
• The average claim for SMEs is £49,000. • It encourages and rewards innovation in business. • You could get up to 26% of qualifying costs back. • Unlike the other tax reliefs, the government actively wants you to claim it. • When your claim's approved your business can make of its reward in whichever way you choose.
There's more to it than lowering your taxes, you can surrender your R&D tax losses for cash from HMRC. If things don't work out, even failed or abortive projects can be included in a claim.
Do I Qualify For R&D Tax Credits?
This is an important question that RIFT R&D Tax Credits believes a lot more businesses need to be asking. Research and Development doesn't just happen in sterile test tubes or high-tech electronics labs. Using HMRC's own words:
"The advance in science and technology must involve resolution of a scientific or technological uncertainty."
Simply put, it's not enough to "reinvent the wheel". You've got to be going places that existing wheels couldn't take us. They're looking for projects that improve either the things we're doing or the way we're doing them. They're talking about the kind of breakthroughs that shed new light on a problem. However, improving things or making them more efficient can qualify - so if your wheel turns faster or costs less to produce then you might be onto something.
Download our brochure for and find out more about R&D Tax Credits.
Here’s a little why working with RIFT R&D Tax Credits can help you:
We're specialists in hunting down every qualifying cost and activity in your business.
We speak HMRC's language too, and have never had a client's claim rejected.
We're here to stay. We're a family owned business established in 1999 and employing over 160 people.
We recently won the bronze award in the Kent MegaGrowth 50 and won the KEiBA award for our customer service.
R&D Tax Credits: Qualifying Costs
Sadly, you can't claim R&D tax Credits for just anything you're doing. In fact, if you don't know the tax terrain it can be easy to get lost in the undergrowth of rules and regulations. However, with the right help and an eagle's eye for detail, the R&D Tax Relief scheme is the single biggest boost your business can get. Here are a few examples:
Employee Costs - The people directly working on the project and all associated remuneration. Even if your employees are only partly involved in research and development you can claim for a proportion of their cost.
Subcontracted R&D Expenditure - If you're an SME, you could claim back a lot of what you're spending on subcontractors for certain R&D activities.
Software - The cost of the software you need for the project.
Materials - The actual, physical materials your project uses up.
Utilities - The water, power and fuels powering your project - although you can't include telecommunications or data costs.
By taking part, you're actually contributing to the country's economic growth.
UK businesses are some of the best scientific and technological trouble-shooters in the world, which is why it's heartbreaking to see how few of them are making good use of the R&D tax credit scheme. At RIFT, we understand the challenges you're facing and we can do a whole lot more than just advise you on your claim:
We'll work with you right from the outset of your project.
When you're ready to claim, we'll prepare your report ready for your accountant to send to HMRC along with your CT600.
We can take care of any of your future R&D tax claims with no stress or confusion.
Tax credits for R&D is a way of getting serious rewards for the problems you're solving, and it covers a lot more than most people realise.
If you would like to know more about what R&D tax credits are and how they could benefit you, get in touch now on 01233 653008 or contact us today to see how we can help turn your inspiration into real-world benefits for your business and beyond.