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R&D tax credit scheme ‘should not be missed’

THE taxman is giving money back to businesses – are you missing out? As a business owner, the opportunity to claim back tax and receive a cash repayment from the taxman can be a very exciting prospect and the Government’s Research and Development (R&D) Tax Credit scheme provides just that. 

R&D tax credit scheme ‘should not be missed’

“The opportunity to reclaim significant repayments from HM Revenue & Customs is already being seized upon by some local business owners, but many are unaware of the opportunity,” explained Nolan Gooch, head of tax advisory at Haines Watts.

The scheme has gained massive momentum over the past few years, partly due to the fact it has received a number of modifications which made it both easier to access and more rewarding. 

“The relief is being actively pushed by HMRC to help support and fund innovation in UK business” Mr Gooch said. “It is available to limited companies that can demonstrate they are seeking an advance in science or technology, the relief can provide a valuable new cash flow to your business.”

A company can claim enhanced deductions against its taxable profits for expenditure which is qualifying R&D expenditure. The amount of the enhancement has increased over the years. The rate was 125 per cent for expenditure incurred before March 31, 2015, and has increased to 130 per cent from April 1, 2015. This amount is in addition to the actual expenditure (ie a 230 per cent total deduction). R&D enhanced relief represents an additional corporation tax reduction of 26 per cent of the expenditure incurred.

Uptake of the relief is on the rise, but there is still a significant amount of UK businesses not gaining benefit from the relief that could, as they do not think they qualify. 

“When you think of research and development, the first thing that probably springs to mind is scientists in white lab coats fumbling around with Bunsen burners and test tubes” explains Mark Stothard, partner at Haines Watts. “Well, when it comes to R&D tax credits, this couldn’t be further from reality. R&D relief can be claimed by companies that have incurred expenditure on all sorts of innovative projects that involve the development of new products, services or processes. A project should address an area of scientific or technological uncertainty and be innovative. 

“We have found in reality that a wide range of business sectors can benefit including engineering businesses, architects, fish processors and digital agencies. We urge local businesses to take professional advice to ensure that they are not missing out on this valuable relief.” 

If you’d like to book a free, no-obligation appointment to find out more about the relief and whether you qualify, contact Haines Watts in Grimsby on 01472 355215 or Scunthorpe 01724 844876

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