Why business owners are missing out on R&D tax credits

Why business owners are missing out on R&D tax credits

When people think of research and development (R&D) they may think of worldwide organisations developing the latest cutting-edge technology, rather than what their own businesses are doing. Many business owners are unaware that they may already be doing many of the things that make their company eligible to claim R&D tax credits. As such they are missing the opportunity to significantly cut costs.

There are two stratifications of R&D tax claims. “Firstly, the government wants to encourage innovation and R&D, but especially among small companies, so there’s an R&D SME scheme specifically for them. This means that companies with up to 500 employees and turnover lower than €100 million (approx. £86 million) can reclaim at far more advantageous rates compared to the R&D RDEC scheme for bigger companies.

Simon Shuker, Director of Hafren Ousque Associates and Consultant with RandD Tax Limited.

All shapes and sizes

Company size is just one misconception of who is eligible to claim for R&D, the other — and arguably more common— is to do with the type of business. Fundamentally, if a business has spent time and/or money improving a product, practice or process, and have solved technical or scientific challenges in doing so, regardless of industry, they may well qualify to make a claim.

“People tend to dismiss the general development of their technologies and their science,” Simon explains. “Or they simply don’t recognise that it’s something that they can use to make a claim – or if they do they might think it’s harder and more time consuming than it actually is.”

“However, I can easily go through how straightforward it is to impart the information to us, we can then build the claim in a way that takes as little of their company time as possible.”

Making the most of a claim

“We provide advice to ensure our clients are in an optimum position to record their innovative operations and R&D projects, and decide how to present them to give their claim the best advantage. We also show them how best to record future information that helps us when we approach their next R&D tax claim,” Simon explains.

“It’s much easier to work proactively in recording this information than it is in hindsight, so we help clients record everything in the right way within the accounts or project costings.”

To find out if your company may be eligible to claim R&D tax credits, call 07833 207643 or email simon@hafrenousque.com.

Having trained as a journalist with the UK's national news agency, the Press Association (now known as PA Media), Thomas is an accomplished writer with his work published in several business, entertainment and special interest magazines.