Your annual accounts are ready to be prepared but could you find ways to reduce your tax bill or get a cash payment to support your new product development? Well it might be that you can if you are undertaking development activities that qualify as Research and Development (R&D). It’s not just for rocket scientists or research laboratories. In fact far from it, all sorts of development activities qualify – a few are described below and we’ve also added a more comprehensive list at the end. The great thing about UK R&D tax incentives is that they apply to any UK registered limited company in any sector – The Dyson Report on Innovation 2010 made this point saying: “Of the various tax instruments available to government, R&D Tax Credits have the advantage that they seek to help companies that are themselves prepared to invest in R&D. Government does not need to choose sectors or companies, with the result that R&D can be encouraged in the widest … [Read more...]
Now is the time to innovate – Call for UK to target 3% of GDP spent on Research & Development
As someone that meets a lot of people running innovative companies, which gives me some knowledge of the challenges they face – I was delighted to see that the Confederation of British Industry (CBI) has published a report which calls for UK Research & Development (R&D) spend to be raised to 3% of GDP. Like any report of this nature it’s not a short read, so here is a summary of it. You can follow the link at the bottom to download the full report. “Gene editing, space tourism, self-driving vehicles, robotic limbs, floating farms, London to Sydney in four hours. Game-changing innovations like these will shape the course of the next decade. Many will improve lives across the globe.” The report looks at: the case for more investment; why and how we need to build the UK’s capacity to commercialise Ideas; the challenges in our innovation ecosystem that need to be addressed; and the next steps for business and government. “…the House of … [Read more...]
What does Brexit mean for the future of R&D Tax Credits?
The initial shock waves from Britain voting to leave the EU are subsiding, however the longer term impacts are yet to be felt. The big question for those UK companies claiming R&D tax relief and tax credits is - What does Brexit mean for our R&D claims? General opinion is that there will be no immediate impact. Over the longer term there could even be some positive outcomes, as the UK will no longer be bound by EU regulations that put restrictions on how R&D tax relief and tax credits are framed. The UK government, like many other countries around the world, uses tax incentives, such as the tax reductions and cash credits available under the R&D schemes, to make the UK more attractive for companies. They see the R&D tax credit schemes as critical to underpinning UK economic growth and competitiveness by supporting investment in innovation across all industries and sectors. Their belief in the schemes is evidenced by the many recent … [Read more...]
R&D tax credits: Small Business Takes a Larger Slice
latest figures for R&D tax credit claims are out and the number of claims rose in 2013-14 compared with the previous year, with 20,100 claims made in total. This represents £1.75 billion of support and £14.3 billion of R&D expenditure. The total R&D expenditure on which claims were made increased by 7% in 2013-14. The number of claims from Small and Medium Enterprises (SMEs) rose in 2013-14 by 23% over the previous year. SMEs account for the increase in claims The increase in support in 2013-14 was mostly driven by a higher number of SME claims, with the total value of SME claims rising to an all-time high of £800m in corporation tax reductions and tax credit payments. One reason is thought to be the removal on 1st April 2012 of the rule limiting payable R&D tax credits to the amount of an SME’s total payroll/PAYE tax liability, as well as increases in the rate of the R&D enhancement for SMEs claims, which went up from … [Read more...]
Research and Development Tax UK Credits – Are You Claiming?
Research and Development Tax Credits in the UK has been uplifted each year for the past three years and are now at a record high level and are a great benefit to eligible Small and Medium Sized Enterprises (SME). The interesting fact is that many SMEs are not claiming when they could and should be. The R&D tax relief or credit is against corporation tax you have paid, or if you made a loss it is a cash credit at a reduced level. The current claim rate is at 125% of spend Currently the benefit is 125% of the value of your eligible spend on R&D. That means if you spend £100,000 on R&D in 2012 you can put an extra £125,000 against your corporation tax - saving you £25,000 in tax that you would otherwise have to spend! Usually the critical factor for a small business is understanding the scope of what can be claimed in terms of eligible projects and then writing a technical justification to support their claim for R&D Tax Credits. Misunderstandings... Some … [Read more...]
