Did you know that all UK Corporation Tax paying companies could claim back a proportion of their tax based on the funds they have invested in research and development. A huge £7 billion of CT600 relief has been claimed since the scheme’s inception in 2000-2001, including £1.1 billion by 10,070 UK businesses for 2010-2011. That’s the good news.
But there are many businesses, particularly SMEs, that fail to capitalise on the full tax benefits of innovation. Is your amongst them?
There are many reasons for this, including:
- a lack of awareness of the scheme;
- a false or outdated belief that their innovation won’t qualify; or
- the fear that the process of claiming too complex.
For the purposes of this incentive scheme, R&D isn’t only some rare activity performed by scientists in a development lab. No, it’s defined by HMRC as ‘an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty’. That’s a very wide net.
The range of innovation areas is vast and ranges from the expected product and prototype development (especially including innovation in software) to process improvement and even ancillary matters. You don’t need to have a dedicated research department; you don’t even need to have scientists on your payroll. All you need to show is that you have tackled a technical problem using novel methods while investing in a new product, process or service in a systematic way. R&D involves risk and uncertainty, so your efforts may even have failed, yet can still qualify if knowledge has advanced as a result of your efforts.
There are two schemes, one for SMEs and one for large companies. Claims for both can be made retrospectively for up to two years.
- SMEs making a profit can deduct up to 225% of their eligible expenditure from their corporation tax liability.
- SMEs who are in a loss-making position (for tax purposes) can claim up to 25% of their eligible expenditure as a payable tax credit.
- Large companies can deduct up to 130% of their eligible R&D expenditure from their taxable profit But there are changes in the large company scheme coming in.
How do you claim with our R&D Tax Credit service
Butler Basford and Lord is a specialist consultancy working exclusively in the field of R&D tax relief and credits and the new Patent Box scheme. The company works alongside your existing accountancy services, whether internal or external, concentrating on maximising your claims.
The comprehensive service comprises four stages.
- An initial scoping visit when we help you to identify areas where a claim is likely. This is completely free of charge.
- Once you have agreed to go ahead we proceed with identification of the specific projects that can deliver claims and extracting the claimable elements from them. We then document the claims in exactly the format that HMRC prefer and which makes it easy for them to process the claim rapidly.
- With your staff we extract the required records to support the claim values. This will include project documentation and timesheets where available.
- We provide the figures for your accountant to add to your CT600 form and submit the claim document. We will field any questions that may arise from HMRC both during the claim process sand later if necessary.
Our fee is based on the final claim value so there is no net expenditure on your behalf – and no risk.
How do you find out more?
Simple. Call for our free R & D Tax Credit assessment service today. We will advise whether or not you have a claim. There’s no sign on cost and our fee is fully contingent on results. So nothing for you to lose – except an opportunity to claim if you delay.