Any company’s Corporation Tax bill can often be enough to make most Founders or CEOs eyes water - however, are you aware that you can easily reduce your tax bill?
If you apply for Research and Development (R&D) Tax Credits, you could receive up to 33% of the money you’ve spent developing a new or existing product, process or service as tax credit, therefore, dramatically reducing your total corporation tax due to HMRC.
Regardless of the industry you work in, as long as you have spent money innovating and working on R&D projects, you could be eligible to apply.
Intrigued? Keep scrolling to find out whether you could be entitled to reduce your Corporation tax liability with R&D Tax Credits.
It’s a common misconception that companies only involved in science or technology are eligible to make a claim, perhaps because we associate them with innovation and new patents.
That’s certainly not the case.
Any UK Limited or PLC company is able to apply if they’ve spent money on a research or development project.
Whether you’ve developed the next software platform for the rental market, tested and created a new fabric made out of recycled material or designed a new mobile app - whatever it may be that you have been working so hard developing, you’re almost certainly guaranteed a tax credit.
Still unsure if you qualify?
Another misconception is that your company must be turning a profit to be eligible. In fact, loss-making organisations are also eligible to apply and the total benefit they receive from HMRC is significantly greater.
Loss-making companies will receive up to 33% of their eligible costs as a cash rebate, i.e. cash in the bank. Whereas, profitable businesses will receive up to 25% of their eligible R&D costs but as a tax credit, which will go against any current or future tax liabilities.
Pay less, earn more
The Research and Development Tax Credit Scheme was set up to encourage entrepreneurship and innovation within the UK by rewarding companies for engaging in creative new projects which will drive economic growth.
It’s an incredibly beneficial scheme, the largest tax benefit for UK startups and SMEs, but it’s not widely publicised and very few companies are even aware that they would qualify for a large lump sum of reimbursement.
In fact, only 10% of eligible companies apply! You’ve already spent the money on the R&D so why not submit an application and reduce the amount of corporation tax that you have to pay at the end of your financial year?
Don’t miss out
Remember - there is a limited time frame for making a claim. You have up to two years to submit your application, starting from the end of your accounting period. Too often companies realise too late or just within the nick of time that they are eligible to put forward a claim.
In these cases when you’re racing the clock, using a professional R&D Tax Specialist, such as Claim Capital, to complete the claim on your behalf can help ensure that the process goes as smoothly as possible.
Our team here at Claim Capital knows exactly what HMRC requires and are well-versed with the system procedures - we operate a 100% success rate in over 450 claims to date! Claim Capital is one of the UK’s top R&D Tax Credit Specialists, with a wealth of experience and knowledge and a team that will ensure to maximise your claim.
Arrange a call today to learn more about how we can help your business complete the Financial and Technical reports and see that your claim reaches HMRC within 3-5 working days!