R&D Tax Credits

When small companies think about funding, they tend to overlook one of the best potential sources – R&D Tax Credits.

R&D Tax Credits enable companies that incur costs in developing new products or processes to either vastly reduce their tax payment or to receive a cash payment back from HMRC.

Don’t be put off by the name; people still think of R&D qualifying companies as being university offshoots that develop the latest superbug vaccine. Not at all. The Government’s desire to make the UK an attractive place for small companies to prosper has led to enhanced incentives to encourage spending on R&D type activities in the form of a far broader range of qualifying activities and improved rates.

If your company and the relevant project meet the necessary criteria, relief may then be claimed on staff costs, sub contractors costs and even consumable items such as heat and light, materials, etc.

Qualifying projects may include, for example, the development of a new product or service or even an improvement to an existing product or service. The implementation of new systems. The customisation of products. In other words, you may often be eligible for R&D Tax Credits if you are simply improving or developing a product or process. It no longer has to be rocket science!

Further good news is that you can go back two years with a claim so if you’re only just considering it now you may be entitled to more than you imagine.