How to pay less tax in a few easy steps – it’s not rocket science but it does require some development activities!
UK companies are missing out on claiming Research and Development (R&D) tax credits which means this great tax reduction scheme is under-utilised in the UK, compared to other European countries.
If your company is using science or technology innovatively to create new or improved products, processes, systems or services, for yourselves or for your clients, you may well qualify. The average claim value for small and medium sized companies in 2011 was £43,000 and since then the rate at which a company can claim has been increased.
“Literally thousands more companies qualify and they just don’t realise it.”
Watch this video on three thing to look for to identify research and development for tax credit claims…
The words research and development conjure up images of men in white coats in laboratories making scientific breakthroughs and that is the wrong image. The lack of knowledge within companies, about whether they qualify, is often mirrored by a lack of awareness by their accountant. This is a great pity and something we are aiming to change by working with accountants to assist their clients.
Most software development companies and many companies that are creating new products will be eligible to get a tax credit or tax relief, as will some engineering and electronics companies that are creating complex, bespoke solutions for their clients.
Which companies are benefiting?
Here is a list of just a few examples of the types of companies that have made a successful claim:
- A Test and Calibration specialist developing an innovative air flow testing device and deep cleaning processes for heat exchangers
- A legal company developing award winning, innovative, paperless conveyancing processes
- Numerous Software development companies developing new Cloud based eCommerce and eBusiness system
- A construction company developing project and work control systems using mobile and internet technologies to transform processes and profitability in managing large refurbishment contracts
- A winch design and manufacturing company, developing new winch solutions where none were previously available
- A financial services business able to respond with innovative products and marketing/sales methods through the rapid development of eBusiness software
- A firm of bailiffs that developed portable and web-based systems to transform operational processes efficiency and cash collection rates
- An injection moulding company specialising in developing the tooling and manufacturing process to address very complex moulding challenges for new products
- A number of companies developing innovative, low cost web hosting services
- A highly successful electronics manufacturer winning significant international business, through finding more innovative designs, materials and manufacturing processes
It can take as little as five weeks to get a cheque back for overpaid tax as a result of an R&D tax credit claim – companies can claim for the last two years as well as the current year.
Posted by Linda Eziquiel