Breakdown
As you all know, the pandemic has impacted everyone in one way or another. Today, we are here for business owners who have been affected through the various lockdowns. The government has issued several incentives, which have been confusing or pulled without much notice.
If you would like a helping hand to replenish your cash reserves or pay some of the PPE requirements that you have had to fork out for, then stay tuned, you are in the right place!
This article is targeted towards business owners who never applied for R&D Tax credits before. If you’re curious and want to know a little bit more before making any decisions, then this article is for you.
What Is The R&D Tax Incentive?
The R&D Tax Incentive was introduced by the government in 2000 to encourage innovative companies to increase their investment into R&D and grow the innovation of UK companies.
The R&D Tax Incentive offers reductions or rebates of corporation tax for any eligible R&D activity, regardless if you are a profit or a loss-making company. Do not miss out on the potential thousands of pounds that you could be re-investing into your business, use our calculator to calculate your potential claim today!
How Do I Know If I Qualify For R&D Tax Credits?
You must meet this criteria:
- Be a UK limited company that has been trading for 12 months, and does not fear liquidation, administration or planning to close in the near future
- Have incurred costs for eligible R&D activity
Some helpful background tips:
- You can backdate a R&D Tax Credit claim up to 2 accounting years. These claims are submitted within your 12-month financial periods.
- The incentive primarily aims to reduce your Corporation Tax bill, but often you can receive a tax rebate from pervious years and even receive a payable credit in form of a cheque or a bank deposit from HMRC.
- It is project-dependent, not industry-specific. If your R&D project makes a ‘’scientific or technological advance’’ it will be eligible.
- R&D Tax Credits are worth as much as 0.33p for every £1.00 you spend on R&D related projects.
Great to know:
- You can still claim tax relief even if your R&D project fails.
- You can still claim R&D Tax Credit if your company is making a loss.
- If we work on your R&D Tax Credit Claim, you don’t pay us unless your claim is successful.
As per HMRC’s guidelines, a project does not have to be successfully completed for it to be classed as qualifying under the R&D Tax Incentive. Failed projects, whereby the technical uncertainties could not be overcome can still qualify under the incentive as long as the work carried out falls within the criteria.
What Costs Can I Claim For?
- Utilities.
- Salaries and wages.
- Employer’s NI contributions Employer’s Pension Contributions
- Materials and wastage consumed during the project
- Prototypes created
- Subcontractors’ invoices
- Software licenses
How Do I Claim R&D Tax Credits?
- Make sure you qualify first
- Produce a technical report
- Provide evidence and calculations to support your claim
- OR contact tax specialists like ourselves who will take care of everything mentioned above