Innovative firms are missing out on income they could gain through the Government’s research and development (R&D) tax credits, which are designed to reward and encourage greater innovation across UK-based business sectors.

This form of tax relief could amount to tens or even hundreds of thousands of pounds every year, which could make all the difference to a small firm’s bottom line and reinvestment capability.

However, despite the obvious benefits claiming this tax relief could bring, the vast majority of firms that are potentially eligible for them have never made a claim, mainly because they do not realise that their work makes them eligible or because they do not know how to claim them.

Many business owners are unaware that R&D applies to businesses in most sectors, not just science. Moreover, HMRC’s own figures have revealed that hundreds of businesses operating in a variety of sectors, including administration and support services, construction, transport and storage, arts, entertainment and recreation, education, health and social work, finance and insurance, have claimed the tax relief.

The Government is clear that any project that can demonstrate that a business is seeking to resolve a scientific or technological uncertainty qualifies as R&D. Projects could include developing a new process or service or even be an improvement to a successful one.

Business owners are also unaware that research and development activities undertaken can be unsuccessful and still qualify, and businesses can make a claim for up to two years from the end of the tax year in which the work takes place. R&D tax credits can help to reduce a limited company’s corporation tax bill or be claimed as a cash sum reimbursement from HMRC if the company is loss-making.

If you have any questions regarding tax, please get in touch with our expert team today, leaded by our Corporate Tax Director David Hibbert at davidhibbert@smailesgoldie.co.uk or call 01482 326916.

The following two tabs change content below.
Avatar

Smailes Goldie Group

We are a leading firm of chartered accountants, tax advisors and business advisors offering a full range of financial advice for you, your family and your business. Our clients range from SMEs and large corporations to Owner Managed and Family Businesses, Professional Partnerships, Sole Traders, New Businesses, Charities and the Not for Profit sector.

Subscribe to our e-newswire
To receive our e-news and events updates, please enter your details:
If you would like to see full details of our data practices please visit our Privacy Notice.

I am happy to receive newsletters and promotional information from Smailes Goldie.