It’s been estimated that as many as 97% of eligible business still fail to claim the relief they are entitled to. Here, I’m talking about Research and Development tax relief.
More than ever, the Pandemic has forced businesses into different ways of working. Innovative thinkers are developing new ways of attracting revenue streams and many have put significant time and effort into the research and development of new products and services to help attract new customers in our ‘virtually normal’ world.
If your organisation has been doing any kind of R&D, it’s worth investigating if your project is eligible, as the tax relief on offer is substantial. A key point is that you can claim within two years of the end of any accounting period and as most accounting periods are 12 months, that means you can claim for R&D completed up to three years ago! Tax relief can even be claimed on unsuccessful projects.
R&D tax relief was first introduced 15 years ago as an incentive to encourage Limited companies to invest in innovation in the UK. According to HMRC, it can “be claimed by companies that seek to research or develop an advance in their field.” That’s a pretty broad spectrum and could include R&D projects for any business or franchise working on new products or services, or for any company considering longer-term R&D projects.
If your R&D project meets the specific criteria costs can be claimed. However, here’s the interesting bit: an additional 130% of the qualifying R&D costs can also be claimed for tax purposes. In other words, for company qualifying for £100k worth of R&D, there are additional qualifying costs of £130k taking the total to £230K. This is a huge amount!
In addition, if your circumstances have changed during the current crisis (who’s hasn’t?) and you have previously claimed but chosen not to take the payable Tax Credit, then you can alter your decision so long as it’s within two years of the accounting period end.
If you already claim R&D Tax credits, you can free up cash payments early by shortening your current accounting period. This means you can claim as soon as you can get your accounts and R&D claim ready. For example, if you have a March 2021 year end and always get a decent sized R&D Tax Credit, by shortening your year end to December 2020 and working fast with your claim, you could potentially get your R&D Tax Credit payment by mid to late November! You can shorten your accounting period as often as you like, this isn’t abuse of the system only a platform to gain access to cash when it’s needed most.
More information about R&D tax relief can found on www.gov.uk. The claiming process and criteria is fairly complicated, so if you need help do not hesitate to contact us. d&t has a 100% success rate with R&D claims. At d&t we help our partners wake up to what’s on offer, always helping them to keep their franchises moving forward towards a successful future. Don’t forget: if you snooze, you lose. So if you do one thing today, look into R&D tax relief or just give d&t a call to find out more!
