Companies, especially SMEs, always seem to be undercapitalised. So why is it that a source of government funds, with no strings attached, is desperately underutilised?
It is the Research and Development Tax Credit business incentive for SMEs that is so underutilised. Amongst the countries of Europe, the UK has the lowest rate of claims of this incentive; that cannot be right. The UK has always benefitted from innovative ideas; the universities and bright companies leading the field in science, technology, engineering and IT innovation.
Where has it gone wrong? Large companies are claiming in greater proportions, so what’s special about the SME sector? Why are these companies leaving money on the table?
The number one reason seems to be self limitation. This comes in two forms. Business owners have either never heard of the scheme or, either through ignorance or bad advice, believe it does not apply to them. The majority of our clients, when we initially spoke to them, fell into one or other of those categories. Even their accountants have fallen into the same trap.
The problem is that, unless the accountancy practice has a specialist in the area of R & D tax credits it is easier to say ‘No’ and miss a great opportunity.
The point is that the terms of the scheme are quite widely defined. Your innovations must involve science and technology, must be something that is beyond a ‘competent professional’ to deliver and be uncertain of outcome. That’s what R&D is.
If these criteria apply to you in any way then it is well worth looking further.
The scheme is not limited by industry. It’s not just about white coats and sealed off labs. The scheme covers an enormous range of activities, like improving an existing product, making a building greener, reducing the costs to make a product, rebuilding your internal IT to meet new demands. If what you are doing is novel and adding to the store of human knowledge then it’s time to claim.
It costs nothing to ask, and involves very little effort to claim through a specialist. If your current accountant does not have a specialist on his team then look elsewhere for this service. No need to upset your accountant, the vast majority of small and medium sized practices cannot afford to keep up to date in this area that involves technology far more than accounting anyway.
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.
This underuse of R&D Tax Credits in the UK contrasts dramatically with the situation in Maryland in the US. There the state legislators are looking to treble their R&D Tax Credit budget as it always causes queues when the budget is released and many claimants go without. The state took the application process online recently, an alternative to having applicants sleep on the sidewalk to nab the elusive incentives. Supply still greatly outstrips demand.
Here, in the UK, there is no such limit.
Footnote Source: http://www.bizjournals.com/washington/blog/techflash/2013/01/md-tech-council-calls-for-rd.html