How to Convert Business Solutions into Cash Incentives
As a business owner, you never switch off from coming up with new ideas, do you?
Another business venture; a new way to make your existing business run more efficiently; ideas to reduce costs and overheads. It’s those ideas that got us to where we are today, and which make our businesses successful.
What if I were to tell you that those ideas in themselves could be a financial asset to your business? Has that got your attention?
Let me share with you my experience of a little-known tax advantage that could benefit your business and financial standing. R&D (research and development) Tax Credits aren’t exactly a secret. It’s just that many businesses don’t realise that their activities could qualify for them.
After all, you would be forgiven for thinking that research and development tax credits only applied to primary manufacture or areas of scientific research. However, many different types of businesses, from production to service industry, even online-only businesses, can qualify for R&D Tax Credits.
Let me explain.
Most businesses come up against problems from time to time that have to be solved in order to move their business forward. Often, due to the specific nature of your problem, a straightforward answer isn’t available and you have to derive your own solution. And there it is. Your research and development. So, the work that went into this new idea, new process, service or product (that you had to do anyway, for the growth of your business) probably means that you should consider making an R&D tax claim.
Is it worth it? Well, I think so. The government put R&D tax funding in place specifically to encourage development and enable businesses to grow. In fact, for most progressive businesses, it is probably the best tax initiative available.
R&D tax credits allow UK companies that have invested in R&D to reclaim up to 33% of the costs incurred, either as a cash payment or a tax reduction. Some ideas take time, and that’s no problem either, you can claim historically up to two financial years.
How to Make R&D Tax Credit Claims
An R&D tax claim could even be the silver lining to an idea that didn’t quite work out for you. All that hard work and nothing to show for it? Being able to claim financially on an idea that was ultimately unsuccessful, despite your continued efforts, means that you can channel those reclaimed funds back into your next big idea.
So, how do you go about claiming? It is possible to make a claim for R&D Tax Credits yourself through your tax return. First of all, you need to determine what your qualifying costs are. They are usually made up of money spent on prototype materials or developers and any other outlay that directly supported your R&D.
To simplify the process, you can enlist the help of a professional service that can correctly apply the current legislation and make accurate claims on your behalf; supporting you to receive the maximum relief available. This is the most straightforward, and risk free approach, as it leaves your time and resources free to concentrate on essential business matters.
In this ever-changing business world, you cannot afford to stand still; you need to evolve to progress. So, keep those ideas flowing and in recouping some of those R&D costs you’ll benefit your business in more ways than one.
For more information on making an R&D tax claim see www.gov.uk.
For professional assistance locally and to determine whether your business has a valid R&D Tax Credit claim, visit rd-tax-expert.co.uk.
You can enquire about potential eligibility and read about successful R&D tax claims made in Lichfield, Birmingham and Staffordshire here.
