Tax

Would you believe it … Tax savings for being brilliant!

Research and Development Tax ReliefI often have a rant at HMRC, but only when the unfairness of their actions reaches a point that I can no longer contain my displeasure. Equally, because fairness should of course be the driver in all things tax-related, I am happy to accentuate the positives in the system, when they exist.

Innovation equals tax relief …

Commercial success has long been associated with invention and finding faster, cleverer, more efficient methods of working: perhaps even bringing a completely new idea to life. So, it makes perfect sense (not that making sense is always considered in developing tax policy) to encourage innovation within business. This is commonly known as Research & Development (R&D) and many companies will put aside a budget each year to focus on such projects and endeavours.

In keeping with this creative wisdom, companies that meet the criteria are entitled to claim R&D Corporate Tax Relief. So, here is a rough guide to what opens the door to you receiving R&D Tax Credits.

Can you answer ‘yes’ to any of these questions?

If your company is engaged in any form of research and development, whether it is practical, software, product, or solution driven, you may well be entitled to the relief.

In a world where tax is usually all about taking away from your profit, you may as well find out if you can get some back: Why should your investment in being brilliant cost more than it has to?

Do any of these describe your investment in R&D?

Technical Challenges: Are you undertaking a project that involves any technical challenges? These should be areas where there is not already a standard technical solution.

System Uncertainty: Before the project started, was there any degree of uncertainty about the system? This indicates that you had to innovate during the project.

Developing Solutions: Will you need to deduce new solutions, not readily available, to solve the challenge? These could be methodologies that are new in your marketplace.

Increasing knowledge: Have you increased your knowledge as a result of the project’s challenges? Often the field of research and development brings other discoveries to light.

New standards: Is this project setting new standards in your field? The whole purpose of research and development is to advance abilities, standards and potential in a business or marketplace.

If you are involved in a research and development project, and you are able to answer ‘yes’ to any of the statements above, you could be eligible for R&D credits.

Perhaps you have already undergone a project, or a number of projects and this blog has raised the question of retrospective claims. The good news is that you can claim for past projects – get in touch and we’ll show you how. Or it could be that you are in the middle of or about to start some new R&D. Well there is no time like the present to see if we can help you ease the burden of cost on some of the great work you are doing.

If you have any questions, or would like to know more, contact our in-house R&D Tax specialist, Gareth, to help discover how much you could claim.