Companies like yours can claim cash back from the government against a wide range of costs if they were incurred on innovation, research and development. Get your share of the £3.5 billion awarded last year.
According to the Research and Development (R&D) Tax Credits Statistics September 2020, by HM Revenue & Customs (HMRC), there have been 59,265 R&D tax credit claims for 2018 to 2019, as of the end of June 2020.
Out of this total, 52,160 of these are in the Small and Medium-sized Enterprise (SME) R&D scheme.
Both SMEs and larger businesses benefited from £3.5 billion in tax relief, which contributed to £24.9 billion in R&D expenditure across the UK.
However, this tax credit does not usually get utilised, and many businesses miss out due to the misunderstanding among the SME community that only large firms or the most innovative projects can claim.
SMEs R&D Relief
Many SMEs can benefit from R&D credits, and there are various tax reliefs to take advantage of.
For example, the SME R&D Relief is available to businesses with less than 500 employees or a turnover below £87 million. This relief can allow SMEs to deduct an extra 130 per cent of their qualifying R&D costs from their yearly profit, along with the usual 100 per cent deduction to total at 230 per cent. Meaning, an additional 33p is granted for every £1 spent on R&D.
To be eligible for this relief businesses need to meet the following criteria:
All projects must involve a search for an advance in science or technology to be eligible for R&D relief. Or, you could detail how you overcame a difficulty on this project that could not be easily carried out by a professional in the same field as your project.
The rules and criteria surrounding R&D tax credits can be complicated and confusing. Therefore, it is essential to seek specialist help.