Amidst the COVID-19 crisis, we’ve been advising our clients to explore the possibility of making a Research & Development (R&D) tax credit claim. This has resulted in us submitting a record number of claims; in the space of just two months, we have claimed over £1m back in R&D tax relief for our clients.
Never has the saying ‘cash is king’ resonated more with business owners. In order to survive, businesses are having to adapt quickly to this new landscape. By battening down the hatches, finding new efficiencies and adopting an agile approach to operational planning, businesses give themselves the best possible chance of weathering the storm.
There is one option in particular that we are urging all limited companies to explore, R&D tax credits. It’s a relatively quick and easy way of injecting some extra cash into your business. We have long been advocates of this fantastic scheme but there has never been a more appropriate time to utilise this government incentive.
R&D stands for research and development. R&D is a government incentive designed to drive forward innovation across multiple industries. This is an opportunity for you to reduce your corporation tax bill or receive a refund from HMRC based upon the working hours your business dedicates to R&D.
The scope for R&D is much broader than many think. In fact, we firmly believe that most trading businesses are eligible to claim for the relief. If you can answer yes to any of the following, then you are likely eligible:
- Are you creating something new?
- Are you making improvements to something already in existence?
- Are you extending the overall knowledge in the field?
In essence, R&D rewards those who overcome uncertainties. If your business wasn’t eligible to claim prior to the COVID-19 outbreak, there’s a chance it is now as this pandemic presents nothing but uncertainties and many businesses are innovating their way over the hurdles presented by the virus.
Sadly, we’ve always found that R&D is extremely under claimed. Many businesses perceive the R&D activities they undertake as nothing more than ‘business as usual’ or wrongly believe that the scheme is limited to lab coat companies. Whatever the reason, in 2018 just under 50,000 R&D claims were submitted in the UK. This number is a ‘drop in the ocean’ compared to the number of businesses that were actually eligible to claim.
The one thing we urge you to take away from this is that if you even suspect you may be eligible, it’s worth exploring the possibility. There really is nothing to lose, but there is certainly a lot to gain with the average cash refund amount for our clients being £5,800.
If you would like to find out more, please take a minute to book a free call with one of our R&D specialists. We’ll be able to provide you with an estimated claim amount after just one, short no-obligation phone call.