Research and Development (R&D) tax relief claims are far higher in recent years than ever before, with an astounding £21.4bn in tax relief claimed overall as confirmed in a report released by HMRC on 27 September 2018.
Between 2000-2017, there have been over 240,000 claims made across the UK, with nearly 40,000 of those claims being made between 2016-2017 alone. The report detailed that the “manufacturing”, “professional”, “scientific and technical”, and “information and technical” sectors made up 75% of these recent claims. The average claim was for over £50,000.
The increase in claims is likely down to a removal of minimum expenditure of £10,000. This means that there is now a higher chance of eligibility.
R&D tax credits reward UK companies for investing in innovation. As an incredibly valuable way for the government to provide tax relief to encourage investment, they were introduced in 2000 for small and medium enterprises (SMEs), and a separate scheme was launched in 2002 for large companies.
R&D tax credit rates work out to up to 33p for every £1 of qualifying expenditure, with two uses – either as an alternative option to innovation grants for research, or they are used in conjunction with them.
If you are not sure if your project is scientifically or technologically possible, or you don’t know how to achieve it in practice, you could be resolving uncertainties and therefore potentially qualify for R&D tax credits.
To be eligible, a company must do one or more of the following:
spend money on new processes or services
enhance existing services
spend money developing new projects
They can then be eligible for a cash payment and/or future corporation tax reduction.
Shelley Capital Management provides a range of accountancy and advisory services to entrepreneurial clients to ensure they maximise their financial position and achieve their financial growth goals. We can provide advice and support on R&D tax credits and manage the entire application process. We have a 100% success rate of our applications with HMRC. One example of this is with a corporate client, which produces innovative gaming software, who have to date received a total of over £65,000 as R&D cash refunds. This has provided a boost to short-term cash flow which is critical for start-up businesses.
Please contact us via the details below, for a no obligation, no fee chat to discuss your requirements. Our fee charging, should you wish to go ahead, is totally transparent and based on the work involved and not based on a % of the reclaim amount. This ensures you retain the majority of the refund.
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