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by Jonathan Leefield, MD, Datafox

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How to increase your business growth with R&D tax credits

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The focal point of every business is to find more money to increase the business growth curve – and one of the best ways to obtain future funding for your business is by claiming tax credits for research and development activities.

 

Claiming research and development tax credits today will mean increased funds are available for your business expenditure this year and for many years to come. The government-backed scheme offers an opportunity to win a financial gain by claiming these tax reliefs and not be overwhelmed by more red tape. Planning will pay off in the form of “cashback” from HMRC, with the R&D tax credits scheme through your corporation tax relief.

 

Reduce your tax bill or claim cash credits through the scheme and you can invest further in more research projects and develop new business opportunities with innovative services, products and processes.

 

But this critical route for future funding is often not effectively exploited by SMEs, because most don’t have a clear idea if they are eligible to claim R&D tax credits. Additionally, general accountants lack sufficient knowledge of what constitutes R&D for HMRC purposes, and they hand down a considerable workload for the claimant.

 

“Businesses small and large across the UK are losing out on billions of additional funding by not claiming R&D tax credits,” said managing director of Datafox R&D tax credits Jonathan Leefield. “The government is keen for business to utilise this scheme as it helps to make UK plc stronger for innovation within the global market.”

 

How can R&D specialists help SMEs?

 

It is crucial to know if your business qualifies for tax credits for R&D. The scheme has a broad definition as it includes several elements. Government guidelines state that projects which meet the eligibility criteria for R&D projects looked for an advance in science and technology, had to overcome uncertainty, tried to overcome this uncertainty, and couldn’t be easily worked out by a professional in the field.

 

Unsuccessful research projects can be eligible too as they can also aid advancement in the scientific and technological worlds. You just need to prove how your project has made an advancement in science or technology, and you can claim R&D tax reliefs to use next year and beyond.

 

An R&D specialist can help you with that. A host of projects can be explored for potential R&D relief. As experts in the minutiae of HMRC’s dos and don’ts, Datafox can help you start your claim. It’s that simple, and the rewards will undoubtedly pay off.

 

If it meets one of the following chief criteria, then most likely, your business can acquire funding through tax credits for R&D. As a starting point, here are three reasons why your company is eligible for R&D Tax Credits. The clues are in the name!

 

Research

 

Exploring the viability of new products, new services, new code, new algorithms and new performance metrics, and acting on customer feedback and demands, are all examples of qualifying eligibility for R&D tax credits. The human intelligence, artificial intelligence, staff hours and time invested in bringing new products to market, new services and new practices qualify. Record and quantify your research programme and your business will be eligible.

 

Development

 

Ideas are one aspect of these tax credits. Development makes the ideas and innovations a reality. Trials, testing, retesting, building, rebuilding, removing bugs from systems, analysing and finalising is what drives business enhancements forward – the development part of the R&D Tax Credit claim.

 

So, if research and development are the first two reasons your business is eligible for R&D tax credits, what’s the third?

 

Innovation, improvement, investigation

 

Innovation takes several forms and can have positive tangible or intangible outcomes. There isn’t a one-size-fits-all for many business tools throughout all industries. Fundamental business systems for financial control, CRM, HR or stock management often have to be redeveloped to accommodate your particular business needs – this would qualify for R&D tax credits, as would tailor-made systems.

 

How much can you benefit from R&D tax credits?

 

As an SME, you can claim R&D relief if you have fewer than 500 staff and a turnover of less than £100million. It means you can deduct an extra 130 per cent of qualifying costs from annual profit, as well as the usual 100 per cent deductions, so that you can enjoy a total 230 per cent deduction. And this, in turn, can mean more disposable income for next year’s budget planning – more money for you to use.

 

Future funding and business growth

 

Tax credits can be claimed for two financial accounting years in arrears and then in the subsequent fiscal year.

 

“Make that first step towards more business funding today by contacting an R&D tax specialist,” said Jonathan Leefield, MD of R&D tax specialists Datafox. “The money is available to reward those businesses that can demonstrate innovation, so why not?”

 


Start your claim today with Datafox R&D tax credits at www.data-fox.co.uk

or write to us on info@data-fox.com

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