|Tax Credits – Is Your Business Losing Out ?|
|SMEs still losing millions in unclaimed R&D tax credits|
UK SMEs are missing out on millions of pounds of
tax credits by not claiming for new product research and development costs.
SMEs are failing to maximise their tax efficiency which, in turn,
impacts on their ability to finance new product development
|There has been a steady increase in R&D tax relief claims since its |
introduction, but there is still a chronic lack of awareness amongst the UK’s SME base. The result is that hundreds of millions of
pounds of R&D tax credits are going unclaimed which could make a
significant impact to the ability of an SME to fund new product
Any company or organisation can claim R&D relief whether it is
making profits or losses, with no upper limit on the amount of the
claim. SMEs are capable of deducting up to 230% of R&D costs,
which could include specific costs such as staff costs, consumable materials, subcontracted costs, power, water, fuel and computer
software that is used directly in carrying out R&D.
Many SMEs are involved in R&D and the HMRC definition by no
means restricts the ability to claim to just high tech or
pharmaceutical industries. Many SMEs do not realise that they
have eligible projects or worry that the process is too onerous and
costly. R&D tax credit advice forms part of our specialist business
support service, which covers all aspects of this taxation advice including securing funding.
The primary barrier to claims is that many SMEs and advisers
wrongly believe that R&D relief can only be claimed on new
products. R&D tax credits are not only confined to light bulb eureka moments; product improvements, new ranges and new
production processes can also be eligible.
Furthermore, identifying costs associated with
R&D activity is often seen as a laborious and
minimally beneficial process compared to the
possible tax benefit.
This is not the case.
Plus retrospective claims can be made for the past two years
accounting periods. This can often result in a significant repayment of corporation tax, or if a company is
loss making, a claim for R&D tax credits.
Is your business in one of these market sectors?:
Alarms and CCTV
Banking and Finance
Chemicals, paints and adhesives
Clothing, textiles and fabrics
Construction and building materials
Electronic and electricals
Engineering and machinery
Food and drink producers
Games software industry
Household goods and textiles
Insurance brokers (software development)
Media and entertainment
Personal care, cosmetics and household
Pharmaceuticals and biotechnology
Printing and packaging
Property and construction
Software and development
It is important that SMEs examine their suitability for
reclaiming tax and work with an adviser who
understands how HMRC works. It should take HMRC
around four weeks to process a well-structured claim
and this could radically alter a company’s year-end
financial position and help finance further research and
development work or other investment.
Contact us today on 0208 686 7756 or firstname.lastname@example.org to take advantage of a free health check to
identify potential opportunities