The most common misconception about Research and Development (R&D) Tax Relief is that it’s only available to lab coat companies and software houses, but this couldn’t be further from the truth.
R&D Tax Relief is available to all limited companies that seek to achieve an advance in science or technology in their industry. Things such as developing new products or even developing new processes to make your existing products, qualify as R&D activities.
We often see businesses performing qualifying R&D work without even knowing it!
So ask yourself the following questions to see whether your business could be eligible to claim R&D Tax Relief:
- Have you developed equipment, machinery, products or services using technology?
- Have you tried to improve your existing products through technical changes?
- Have you needed to resolve technical problems through product development?
- Have you found more efficient ways to produce/deliver your products or services?
- Have you experimented with new equipment or production techniques?
- Was it unclear at the start of a project in what was the best way to achieve the objective?
- Have any of your projects failed for technical reasons?
If you’ve answered ‘Yes’ to any of these questions, there’s a strong chance your business will qualify for R&D Tax Relief.
The benefit of R&D is enormous and could provide a major cash flow boost. Your business can save £46 in tax for every £100 it spends on qualifying activities. In some instances, you may even receive a cash repayment from HMRC without ever having paid any Corporation Tax previously.
We encourage all businesses to identify whether they are carrying out R&D activities. At a time when cash flow is critical, can you afford not to?
Contact David Herd to find out if you are eligible to make a claim.
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