Whatever industry sector you are in there is a good chance that some of the activities that you carry out could be eligible for R&D Tax Credits.
At Fiscale, our sole aim is to ensure that our clients are claiming the valuable tax reliefs that they’re eligible for. These are specifically related to Research and Development Tax Credits.
Our combined experience within this complex area of taxation, has helped us to secure extra funding for countless companies and within all industries.
The benefits for business
The R&D tax credit initiative makes economic sense for the government, which is why it has been supported and improved since 2000 by successive governments. Claiming R&D tax credit also makes economic sense for eligible businesses.
The key benefits are:
Reduce tax liability
For profit making SMEs, a reduction of the Corporation Tax bill
Profit offsetting
For loss making SMEs, an opportunity to offset the R&D relief against profits
Improved accounting
Improvement in systems during a detailed analysis of activities and costs
Future innovation
R&D tax credits help fuel motivation for further innovation
Get ahead
Increased efficiency and innovation help a business to enhance its competitive edge
Giving back
R&D tax credits allow companies to make positive contributions to UK Plc.
How do R&D tax credits work?
R&D tax credits work by reducing a company’s tax bill by an amount equal to a multiple of its allowable R&D expenditure.
The tax credit can either be used to offset a tax bill, or taken as cash depending on whether your business is currently profitable. SMEs can claim up to 33% off the money they have invested in eligible R&D and Large Companies can claim up to 12%.
The regulations allow for a claim to be submitted for the current financial year, plus two previous financial years. Claims can be made at any stage of the financial year, not just at year end.
The financial benefit in the first instance can be significant. At Fiscale the average value of a first claim is £67,000.
The relief is tax free and there are no limitations as to how it can be used. Our clients have reinvested in future R&D, purchased additional equipment, hired new staff or paid out additional dividends.
How does the relief work?
There are two different R&D tax credit schemes, depending on the size of your business:
Small and medium sized enterprises
If you are an SME and your company is involved with developing new products or improving existing products you are probably undertaking research and development (R&D). If your R&D satisfies certain criteria you could be eligible for tax relief through R&D tax credit.
Large companies
If you are a Large Company and you are involved with developing new products or improving existing products you are probably undertaking research and development (R&D). If your R&D satisfies certain criteria you could be eligible for tax relief through the Research and Development Expenditure Credit (RDEC) Scheme.
Your business has to be a limited company, subject to UK Corporation Tax and have invested money in R&D. If you fulfil this criteria there are two questions to ask to establish if your activities qualify for R&D tax credit relief:
Are we producing new or improved products?
Did the design & development involve some uncertainty?
If you are still unsure all it generally takes is a five minute phone call to the Fiscale team and we will be able to advise you either way. We have the expertise to quickly understand your business and know whether your activities will qualify.
If in our opinion your business does qualify, we work with you to substantiate the figures, we then prepare a report and we handle the submission of the claim and any communication with HMRC. We have a 100% success rate, so we are pretty good when it comes to assessing eligibility.
Call us Jonathan Buckle on 01440 708333 or email jonathan.buckle@fiscale.com to find out more about Tax Credits and if your business qualifies
Alternatively speak with Rehan at BBX on 01604347733 or email rehan.burger@bbxworld.com
