News Archives | R & D Tax Credits

The Number Of New Technology Startups Is Still Soaring

New figures show that last year saw a further increase in new firms in the technology sector.

Data from Companies House released this week has shown that there were 11,864 software development and programming businesses incorporated in 2018, an increase from 10,394 the year before.

The increase has coincided with the Government’s plan to boost creativity in the UK amongst tech firms, with a huge haul of patents being recorded in the past year, and the value of the technology sector booming to more than £180 billion last year.

The North West sees biggest increase

Interestingly, it was not just London that saw increases, like in 2017 where the capital was seen to have a monopoly of tech firms. Instead, it was the North West that saw an incredible 48% increase in tech firms, the highest growth of any UK region.

Property prices and technological availability have meant that other parts of the UK are now seeing increases. The South East saw 1,398 firms incorporate, a two per cent rise. There were also 422 new tech firms in the East Midlands, up 22 per cent from 345 in 2017.

London saw 4,752 incorporations in this sector, representing a 14 per cent increase.

Technology is a key factor pre and post-Brexit

Amongst all of the uncertainties surrounding Brexit, business owners and politicians alike have consistently used the technology sector as a flag-bearer for the UK economy.

Despite the deadline of Brexit fast approaching, with negotiations seemingly coming to a halt, the Government has backed technology firms to be a key pillar of post-Union life.

This is why it has supported tech firms for the past few years, with growing emphasis on future inventions through incentives such as the Patent Box and R&D tax credits.

Samantha Holloway, CEO of R&D tax credit firm rdtaxcredit.org.uk, commented:

It is brilliant to see this positive trend of new technology businesses, despite the current economic uncertainty surrounding Brexit.

This is a clear indication that UK entrepreneurs are keen to innovate and development new products and services, and the Government is backing them.

The challenge facing these entrepreneurs in the technology arena is the ability to develop at speed and scale-up, fast. Luckily, there has never been a better time to be a business owner in the technology industry, with many funds and grants on offer, such as the R&D tax credit.

What are R&D tax credits?

R&D tax credits, or Research and Development tax credits, are a tax relief designed to encourage investment in research, development and innovation across the UK, particularly in technology firms. They work by reducing a company’s tax bill by a certain percentage of qualifying R&D expenditure, or by a payment in cash, again linked to qualifying R&D spend.

The tax relief was implemented in 2000 by the UK Government, and since then a staggering £21.4bn has been claimed by companies across the country, in the form of 240,000 claims.

Reports suggest that the average claim for UK SMEs for R&D tax relief hovers around £43,000 – £62,000. The claim can be backdated by up to three years, meaning if your legal business has already taken part in research and development, you could be sitting on extra cash.

They can be used as a vital part of a start-up’s cashflow, when cash is often hard to come by.

What qualifies for R&D tax?

If you are technology firm and answer yes to any of these questions, you are carrying out activities that count as R&D. Do you:

Carry out research and development in the field of technology or science?
Develop or design a project that overcomes difficult technological problems?
Create new processes, products or services?
Make improvements to existing processes, products or services?
Use emerging technology to reinvent processes, products or services?

An advancement of overall knowledge

However, sometimes simply developing new products is not enough in the field of R&D tax. Also ask yourself these qualifying questions:

Does the advancement extend the overall knowledge or capability in the field of science or technology and not just the law firm’s own state of knowledge or capability?
Does the project involve an uncertainty that competent technology professionals cannot readily resolve and where solutions are not common knowledge?

Examples of successful R&D tax claims can be projects involving the adaption of premises and software development, automation of admin, website rebuilds, and the adoption of emerging technologies within their workforce.

What’s the catch with R&D Tax Credits?

There are many technology firms missing out on R&D tax credits for a number of reasons. Many tech business owners are simply unaware of the tax relief, owing to lack of advertisement and promotion.

Some are underclaiming due to a lack of comprehensive understanding about some of the subtle details of the R&D guidelines. In addition to this, some tech firm owners believe R&D Tax Credits are only available for traditional research sectors, like medicine.

Many tech firm owners that we have come across simply think it is too good to be true, and there must be a catch. This is leading to many company owners missing out on this legitimate financial reward for their valuable investment within their industry. The Government itself says of R&D Tax Credits:

R&D tax credits are a tax relief designed to encourage greater R&D spending, leading in turn to greater investment in innovation. They work by either reducing a company’s liability to corporation tax or by making a payment to the company.

How can R&D tax help?

This is where rdtaxcredit.org.uk come in. Our experts can guide you through the R&D tax credit process, taking you through the process of which grant is right for you, knowing what you can and cannot claim for, and being able to write the perfect technical narrative which is vitally important in the claim process.

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

Contact one of our expert advisers today for a free initial review, and see if you can claim back some much needed tax relief.

March 28, 2019/0 Comments/by Samantha Holloway

Five Tips for Businesses in 2019

Business Tips, News, R & D Tax Credit

Five tips for businesses in 2019

Make sure your business gets off to the best possible start this year by following these key tips.

Getting your business off to a great start this year requires extensive planning, dedication to put the time and effort in, and a positive outlook for the year ahead. Here, we provide you and your business with five key tips to help you along the way.

Map out your business goals

Any successful business year starts with clear, well-defined goals. Focusing on what you want to achieve, documenting it and then setting up an annual, quarterly and monthly plan to achieve those goals is a great way to get your year started.

Throughout the year, the stresses of the day-to-day often get in the way of being able to see the bigger picture. If you have thorough goals, it can remind you and your staff exactly what you are all aiming for. This then starts to feed into your business values and mission statement.

Begin your plan with a SWOT exercise. This useful analysis helps you identify areas your company succeeds in, and areas it could do better in. The acronym stands for Strengths,Weaknesses, Opportunities and Threats. Going into detail in relation to these four areas is a great way to see where you company stands going into the long year ahead.

After this, ensure your goals are SMART. This means your goals are:

S– specific
M– measurable
A– achievable
R– relevant
T– time-bound

Having SMART goals ensures that the goals are not too vague and your company is able to quickly identify any missed targets. In addition to this, progress is easier to monitor.

Be adaptable

If 2018 taught business owners anything, it was the need to be adaptable. The ever-changing business and political landscape means that business owners are having to use ingenuity to continue to succeed.

2019 will be no different. A good business in the current climate is a business that can change and conform to the latest standards on a nearly real-time basis. This calls for an increased emphasis on developing an understanding of the idea of flexibility and adaptability, in all parts of your business – from HR, marketing and IT, to the board room.

We are seeing leaders in the business community succeeding through their ability to:

Think creatively
Quickly be able to shift focus
Embrace change
Exercise emotional intelligence

The ability to adapt in certain commercial situations determines your level of flexibility — and possibly the heights you are able to achieve in the forthcoming year. If you have the ability to adapt in your industry, you may already be one up on your competitors.

Embrace Video Content

It’s safe to say that business leaders are touting 2019 as the year of the video. In a recent survey across multiple sectors, a question was put to clients:

Where both text and video are available on the same web page, how would you prefer to learn about a product or service?

The answer?

80% video, 20% text

Video has, of course, been a vital weapon in any company’s marketing arsenal for a while now, but 2019 is shaping up to be a video takeover. According to Cisco’s Visual Networking Index, global consumer internet video traffic will account for 80 percent of all consumer internet traffic this year.

There are also now ways for businesses to embrace video without necessarily hiring costly videographers. Mobile phones are now at the cutting edge of high definition cameras, and platforms like Facebook, Instagram and YouTube mean that consumers are more used to seeing footage that is not necessarily studio quality.

Some videos trends to look out for this year are:

An explosion of video on website
Video in email
Live video on social platforms
Native video (direct to Facebook/YouTube)
360-degree videos

Ensure you are catering to the 80% that said they would prefer video over this coming year.

Health and Wellbeing in the workplace

Another area that is set to grow further in 2019 is health and wellbeing. 2018 saw the wellness world expand. People started having more open and honest conversations about mental health, working conditions, inequality and workplace biases.

For your company to succeed in an environment where both workers and consumers are becoming more self-aware around wellbeing issues, business owners have to being thinking about their own business values, and possibly reassess how they carry out their day-to-day work.

Apple recently announced its “best of 2018” and listed self-care as the trend of the year. We believe this trend will continue into 2019, as more people realise that self-care is now essential, not an indulgence. And one dimension of self-care that has definitely been on the rise in the workplace is mindfulness practices. It’s being offered at some of the world’s biggest companies to cut workplace stress and boost productivity.

Ensure you keep a keen eye on both your staff’s, but also your own, mental wellbeing. A healthy business owner breeds a healthy business.

Apply for R&D Tax Credits

Our fifth and final tip for your business in 2019 is one that we have been shouting from the rooftops for a while. In the uncertainty of the following year it is now more important than ever for companies to be prudent with their tax relief efforts. Particularly when it comes to tax relief as a government incentive.

R&D tax credits, or research and development tax credits, were created in 2000 by the UK government to help small and medium enterprises (SMEs) invest in innovation. This is due to the UK government wanting businesses to flourish and compete on a global scale.

The relief works by either reducing a company’s liability to corporation tax or by making a direct payment to the company.

The research and development has to be focussed on advancing industry level knowledge. If the research could be carried out by a reasonably competent professional in that particular field, you may have trouble convincing HMRC of the validity of the claim.

Since the tax relief was introduced in 2000, an incredible £21.4bn has been claimed by UK businesses. On average, an SME’s claim is equal to almost £54,000 – not a sum to be sniffed at.

How can rdtaxcredit.org.uk help?

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the government wants to give you. Especially in this current climate where every penny counts.

Our expert team of accountants are committed to working with you and your company to provide strategic R&D tax credit advice. We can review your claim and propose new techniques to ensure you claim the maximum amount you are entitled to.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

We also provide extensive information on our website should you wish to research R&D Tax Credits in further detail. We have information relating to individual industries such as:

Audio and Visual
Building Technologies
Commercial Printing
Creative Digital and Media
Food and Beverage
Health
Manufacturing and Engineering
Marine
Motor Racing
Pharmaceutical
Software Development
Technology
Telecoms
Web Development

If you would like to contact one of our experts for free initial advice, complete the quick enquiry form to receive a no-obligation review of your R&D Tax Relief claim.

March 5, 2019/0 Comments/by Samantha Holloway

Is R&D stagnating after a lack of funding?

Brexit, Business Tips, News, R & D Tax Credit

Is R&D stagnating after a lack of funding?

After positive trends in R&D tax credit uptake, the signals are innovation is still being held back by a lack of funding.

Figures released last month have left those involved in research and development (R&D) in the UK worried. The growth of R&D spending has slowed dramatically in real terms since the Brexit vote two years amid uncertainty in the business community.

Historically, spending on R&D hovered around just 1.1% of GDP, despite the introduction of government incentives like R&D tax credits back in 2000. This ranked the UK a shocking 11^thin the EU for R&D spend as a share of GDP.

The trend, however, since then was that more businesses were benefitting from R&D tax credits, with the latest figures showing that spending on R&D by UK businesses rose by 4.9%.

However, adjusted for inflation, this equates to just 2.9% which is the smallest increase, in real terms, for several years. This is indicating that, while there is an upward trend, the curve is slowing, and UK businesses are becoming weary of investing in R&D.

The Government realise that the current climate does not lend itself to massive investment in research and development. But in order to compete on the global market, UK companies need to be investing in R&D. The budget 2018 saw the Government’s pledge to raise the total of R&D investment to 2.4% of GDP by 2027, while also investing an additional £1.6 billion in its modern industrial strategy.

And it is needed, demonstrated by the well-documented demise of the Bloodhound SSC project earlier this month, which saw a UK engineering company try to build a car that could reach more than 1,000mph. The company saw its dream scuppered after it went into administration, due to £25 million needed for the final stages of R&D failing to materialise.

What are R&D Tax Credits?

The UK Government is aware that companies like Bloodhound SSC need help to push the limits of both research and development. And it knows that Britain is world-renowned for being a force in innovation and research. However, innovation is not cheap, so back in 2000 they introduced R&D tax credits.

These tax credits were put in place to encourage innovation in UK companies, in order to ensure they can compete with the biggest global superpowers. A staggering £21.4bn has been claimed in tax relief since 2000, in the form of 240,000 claims R&D tax claims.

Paired with special funding, grants, and various other hand-outs, R&D tax credits now help businesses put money into experimentation, research and development, without having to worry about the cost of any losses. They work by either reducing a company’s liability to corporation tax or by making a direct payment to the company.

These tax credits can help companies of various sizes across different industries take on new innovations that can get new products onto the market, or re-invent existing products to make them more efficient.

Is the issue lack of knowledge?

One of the reasons the tax relief is not being claimed is due to the lack of education around the tax break. Experts within the industry believe it has been advertised by the government to UK SMEs poorly.

Many SME business owners are simply unaware of the tax relief, owing to lack of advertisement and promotion.

Some are underclaiming due to a lack of comprehensive understanding about some of the subtle details of the R&D guidelines. In addition to this, some SME owners believe R&D Tax Credits are only available for traditional research sectors.

Many SME owners that we have come across simply think it is too good to be true, and there must be a catch. This is leading to many companies missing out on this legitimate financial reward for their valuable investment within their industry.

Samantha Holloway, CEO of rdtaxcredit.org.uk, commented:

Our figures show that forty six per cent of small business innovators who don’t use government support simply didn’t know it was available in the first place.

R&D stagnating is down to many factors, but this is surely the first one to tackle. Educating business owners that help is out there to invest in research and development.

We would like to see an increase in awareness of R&D tax credits in particular, especially where a small business does not actually have a new-to-market product, but is simply depending on these tax credits to innovate in order to improve productivity.

In addition to this, companies need to better understand the implications of Brexit on R&D tax credits. After Brexit, the UK Government will be free from EU regulation in relation to a subsidy limit, meaning an EU cap will be potentially removed. If this is the case, our prediction is that R&D tax relief would be a massively important element of the UK’s R&D policy, particularly in relation to SMEs.

How can rdtaxcredit.org.uk help?

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you. Especially in this current climate where every penny counts.

Our expert team of accountants are committed to working with you and your company to provide strategic R&D tax credit advice. We can review your claim and propose new techniques to ensure you claim the maximum amount you are entitled to.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

We also provide extensive information on our website should you wish to research R&D Tax Credits in further detail. We have information relating to individual industries such as:

Audio and Visual
Building Technologies
Commercial Printing
Creative Digital and Media
Food and Beverage
Health
Manufacturing and Engineering
Marine
Motor Racing
Pharmaceutical
Software Development
Technology
Telecoms
Web Development

If you would like to contact one of our experts for free initial advice, complete the quick enquiry form to receive a no-obligation review of your R&D Tax Relief claim.

March 1, 2019/0 Comments/by Samantha Holloway

Law Firms Missing out on R&D Tax Relief

Business Tips, News, R & D Tax Credit, Uncategorized

Law firms missing out on R&D Tax relief

New figures show that law firms are overlooking the government incentive, with nearly 9 in 10 law firms eligible.

Thousands of law firms could be missing out on potential tax savings in the form of R&D tax relief, new research has found. Figures suggest that the majority of businesses in the legal sector have developed new products or businesses processes in the past two years.

The R&D figures for law firms

The research shows that an incredible 87% of businesses in the legal sector could be eligible for the R&D tax relief, an incentive the government provides to promote innovation.

A Censuswide survey of 1,000 senior and middle managers in law firms across the country found that 80% of firms had heard about the tax incentive, with only half (47%) ever claiming. The reasons given were that they either believed they did not qualify, or they mistakenly believed it would cost them money to put in a claim.

The law firm execs also vastly underestimated the true value of an R&D tax claim. Across the 1,000 surveyed, the average SME R&D tax relief claim they believed to be true was just under £17,000.

They were, in fact, nearly £30,000 off, with the average claim for their sector being approximately £46,000.

Samantha Holloway, CEO of rdtaxcredit.org.uk, commented:

What we are seeing here is a misunderstanding by law firms on two counts. The first being those legal businesses who believe they don’t qualify for R&D tax, full stop. The second is related to those who realise they do qualify, but grossly miscalculate what is actually owed to them.

This leads to law firms and legal businesses up and down the country missing out on a tax relief that is owed to them – a tax relief that the government actually encourages.

It would appear many law firms are overlooking this legitimate financial reward for their valuable investment within the legal industry, simply through a lack of education.

To remedy that, we can explain exactly what R&D tax credits are.

What are R&D tax credits?

R&D tax credits, or Research and Development tax credits, are a tax relief designed to encourage investment in research, development and innovation across the UK. They work by reducing a company’s tax bill by a certain percentage of qualifying R&D expenditure, or by a payment in cash, again linked to qualifying R&D spend.

The tax relief was implemented in 2000 by the UK Government, and since then a staggering £21.4bn has been claimed by companies across the country, in the form of 240,000 claims.

Reports suggest that the average claim for UK SMEs for R&D tax relief hovers around £43,000 – £62,000. The claim can be backdated by up to three years, meaning if your legal business has already taken part in research and development, you could be sitting on extra cash.

In addition to this, the R&D does not necessarily have to have been successful to qualify, which is an area companies are often mistaken on.

R&D tax credits are championed by the government, with Chancellor Phillip Hammond announcing in the most recent budget the government’s pledge to raise the total R&D investment to 2.4% of GDP by 2027. The Budget report also touted an extra £1.6bn for its modern industrial strategy. All of this should put the tax relief in the forefront of company owners’, and law firms’, minds.

What counts as research and development?

If you are law firm and answer yes to any of these questions, you are carrying act activities that count as R&D. Do you:

Carry out research and development in the field of technology or science?
Develop or design a project that overcomes difficult technological problems?
Create new processes, products or services?
Make improvements to existing processes, products or services?
Use emerging technology to reinvent processes, products or services?

An advancement of overall knowledge

However, sometimes simply developing new products is not enough in the field of R&D tax. Also ask yourself these qualifying questions:

Does the advance extend the overall knowledge or capability in the field of science or technology and not just the law firm’s own state of knowledge or capability?
Does the project involve an uncertainty that competent legal professionals cannot readily resolve and where solutions are not common knowledge?

Examples of successful R&D tax claims can be projects involving the adaption of premises and software development, automation of admin, website rebuilds, and the adoption of emerging technologies within their workforce.

In addition to this, in order to claim the SME R&D tax fund, you will need to ask yourself, is your law firm an SME?

Definition of an “SME”:

Less than 500 Staff
Annual turnover not exceeding €100m or an annual balance sheet figure not exceeding €86m

If this sounds like your legal business, and you have answered yes to the above questions, we are highly confident that you could be entitled to a share of the £21.4bn that has already been claimed by companies in the UK.

How can RDTaxCredit.org.uk help?

RDTaxCredit.org.uk are able to help law firms across the country claim R&D relief, leaving them with more cash to re-invest into their legal business. We have of experience in helping law firms quantify how much their claim could be worth, investigating the actual work to see if it is eligible, while also helping and advising on the claims process.

Our team of Chartered Tax Advisers can ensure you have a robust claim that identifies qualifying R&D and the associated costs. We can assist in the preparation of the R&D claims and submission of the claim to HM Revenue & Customs.

We handle the R&D Claim from start to finish and we produce the technical report on your behalf that helps R&D Tax inspectors understand your work and approve the claim.

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting, especially if you have never claimed the tax before. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review
100% success rate
30 day quick turnaround

If you would like to contact one of our experts for free initial advice, complete the quick enquiry form to receive a no-obligation review of your R&D Tax Relief claim.

February 26, 2019/0 Comments/by Samantha Holloway

New Cap for SME payable R&D Tax Credit Claims

Business Tips, News, R & D Tax Credit

New cap for SME payable R&D tax credit claims – All your questions answered

Will your SME be affected and, if so, how can you prepare for the new cap?

For companies relying on R&D tax credits it was a mixed 2018 Budget day. Chancellor Phillip Hammond announced the government’s pledge to raise the total R&D investment to 2.4% of GDP by 2027. The Budget report also shouted about an extra £1.6bn for its modern industrial strategy, ensuring that British companies stay at the forefront of world-leading industry.

However, with the good news came the sting of a new cap for payable R&D tax credits. This came in the form of a PAYE and NIC restriction surrounding the amount that can be claimed. Below, we guide you through all of the potential questions UK SMEs may have in relation to what the cap means for them.

What is the new cap to payable R&D Tax Credits?

A change in legislation was announced which will see the Government reintroduce a cap on the SME payable R&D tax credits. The cap relates to the PAYE and NIC paid by SMEs within a claimable period.

The proposal states it will introduce a cap of 300% (or three times) the company’s total PAYE/NIC payment for the period.

Before 2012, however, the Government were not so lenient and you could not claim R&D tax credits if you had paid no PAYE or NIC. This was abolished after 2012, with the government now reintroducing the policy with the added three times PAYE/NIC leniency.

Why has the new cap to R&D Tax Credits been introduced?

The PAYE/NIC cap has been introduced to ensure businesses are acting legitimately and to guarantee the tax relief is fulfilling its intended purpose.

It has been positioned by the government as an anti-fraud measure. HMRC uncovered a total of £300m in fraudulent claims by “artificial corporate structures”. This was occurring where structures had been set up to claim the payable tax credit despite having little or no employment or activity in the UK.

Who will be affected by the cap on R&D Tax Credits?

The most likely to be affected by this cap are SMEs who are in the early stages of their life. Generally speaking, start-ups do not employ many employees and often use contract workforces for projects.

Those who do not have permanent employees will not be paying as much as PAYE/NIC as those who do. Companies that are flexible in relation to employment, who use different skill sets for different projects, and are heavily weighted towards third-party costs rather than salaried staff, are the most likely to be hit by the cap.

The Treasury has stated that close to 95% of companies currently claiming the payable credit will be unaffected. However, consultations are to be carried to both confirm that is true and to ensure the impacts are minimised.

How will the new cap to R&D Tax Credits affect SMEs?

Essentially, after the change, an SME’s salary bill will affect the value of its R&D Tax Credit claim. SMEs will have to think about how they resource their business, as it could have an impact on the value of the payable credit.

SMEs will need to reassess their ratio of costs to ensure they are paying enough PAYE/NIC to claim payable credit. They will need to weigh up the pros and cons of the personal tax efficiencies versus the benefits of the business paying salaries and then receiving cash credit.

It is also worth bearing in mind that the cap will only apply to claims for payable tax credit, and will not affect the calculation of the enhanced R&D expenditure.

What are payable tax credits?

Understandably, not everyone understands the ins and outs of payable and non-payable tax credits, so we have a simple explanation below:

Payable tax credits

These are also known as non-wastable, or refundable tax credits. They are not limited and can exceed the value of any tax liability, including a liability of zero. This means they can exceed any tax debt, and can also be paid directly to an individual or company in cash. This type of credit is solely what the new cap relates to.

Non-payable tax credits

These are also known as wastable, or non-refundable tax credits. They are limited in value to the value of your tax liability. Therefore, these tax credits can only ever be granted to individuals or companies with tax liability (a tax debt).

Tax liability

A tax liability is the total amount of tax debt owed by an individual, corporation or other entity to a taxing authority, like HRMC.

When will the new cap on payable R&D Tax Credits come into place?

With this being a relatively big change in how R&D Tax Credits are claimed, the government has factored in time for consultation.

The initial proposal sees the cap starting on or after 1^stApril 2020, which should give HMRC enough time to minimise disruption.

This also gives SMEs enough time to prepare and act now in anticipation of the coming changes.

How can RDTaxCredit.org.uk help?

The proposed changes are significant and will fundamentally change how SMEs apply for R&D Tax Credits. By discussing these issues now, SMEs can be better prepared to reduce any potential changes to cash flow.

RDTaxCredit.org.uk can add real value here. We can advise on how to take action now in order to protect your SME payable R&D tax credit. Now, more than ever, it is vitally important SMEs understand what they can claim for, the process of the R&D tax credit claim, and all of the pitfalls many SMEs encounter while applying.

Our expert team of accountants are committed to working with you and your company to provide strategic R&D tax credit advice in the wake of these changes. We can review how it may affect your claim and propose new techniques to ensure you claim the maximum amount you are entitled to.

At RDTaxCredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

Contact one of our expert advisers today for a free initial review, and see if you can claim back some much needed tax relief.

January 26, 2019/0 Comments/by Samantha Holloway

8 in 10 Transport Firms Missing Out On Huge Tax Relief

Business Tips, News, R & D Tax Credit

Figures show the majority of UK transport firms could claim for R&D tax credits, but aren’t.

Transport firms are the lifeblood of the UK, consistently keeping the country running smoothly throughout the year. Without their hard work and long hauls every day, UK business would simply collapse.

Transport firms also need as much help financially as they can get in this current climate. Figures show that the transport industry is one of the most at risk in the wake of no deal Brexit, and in the face of an unsure future, firms need to be as vigilant as possible.

That is why the news that 56% of transport firms do not know about the government incentive, R&D tax credits, is particularly startling. These firms are potentially throwing away millions of pounds every year, due to investing in new products and business processes that could be covered by the tax relief.

How many transport firms are missing out on R&D tax relief?

Figures show that only 46% of UK transport firms have heard about R&D tax relief, with just a quarter (25%) claiming it. The firms who are aware of the incentive but aren’t claiming are doing so because they either do not believe they qualify, or they mistakenly believe that it could cost them money to claim.

This is in line with UK averages across other industries. Incredibly, the average percentage of eligible firms that have ever claimed R&D tax credits is 37%.

Official Government statistics do show an upward trend in claim value, however. The HMRC R&D tax credit statistics 2018 report showed that there was impressive growth in claim value in Transport & Storage, which saw a 42% increase. This indicates both an increase investment in R&D in transport, but also that those who are aware of the relief and are understanding the claims process a little more.

Samantha Holloway, CEO of rdtaxcredit.org.uk, commented:

The figures show that not enough is being done to educate UK transport firms about the tax relief they are entitled to.

So many companies we come across believe research and development is about lab coats and space rockets. It is much broader than that, and many transport firms who are eligible are missing out.

What are R&D Tax credits?

R&D tax credits can help to reduce a limited company’s corporation tax bill or be claimed as a cash sum reimbursement from the HMRC.

The UK Government is aware that Britain is world-renowned for being a force in innovation and research. However, innovation is not cheap, so back in 2000 they introduced R&D tax credits.

These tax credits were put in place to encourage innovation in UK companies, in order to ensure they can compete with the biggest global superpowers. The Research and Development that takes place does not actually even need to be successful to qualify, and claims can be backdated by at least two years.

It is a hot topic in government too. Chancellor Phillip Hammond announced in the most recent budget the government’s pledge to raise the total R&D investment to 2.4% of GDP by 2027. The Budget report also touted an extra £1.6bn for its modern industrial strategy. In the past the government has also made administrative changes to the R&D expenditure credit in order to increase the certainty and simplicity around claims. Put simply, the government want you to claim this tax relief.

How much are transport firms missing out on?

Since the tax relief was introduced in 2000, an incredible £21.4bn has been claimed by UK businesses. On average, an SME’s claim is equal to almost £54,000 – an amount which no transport executive would turn their nose up at.

The recent figures show that the transport executives who are claiming could be underclaiming by more than double the amount they are owed – on average an underclaiming of £24,955.

Executives believed the average claim value for R&D tax relief to be just £21,045, when the true figure for firms in transport is £46,000.

This is incredible, when thinking about the fact that those transport firms in question have undertaken an average of £333,738 worth of research and development over the past two years.

Relief can be as much as 230% of qualifying R&D costs if you are a small or medium sized enterprise. You can claim R&D tax credits on day-to-day costs and qualifying expenditure, including costs for staff, subcontractors, materials, software and utilities.

If you do fall into the category of SME, you can deduct a 130% of qualifying costs from annual profits, in addition to the normal 100% deduction – making the deduction 230%. If the company is loss making, you can claim a tax credit worth up to 14.5% of the surrenderable loss.

Is my transport company eligible for R&D Tax Credits?

Firstly, this particular tax relief is in relation to SMEs. Is your company an SME?

Definition of an “SME”:

Less than 500 Staff
Annual turnover not exceeding £100m or an annual balance sheet figure not exceeding £86m

Next, your company needs to be taking part in “Qualifying Activity”. This includes:

Qualifying Activity:

Creating new products, processes or services.
Changing or modifying an existing product, process or service.
Activities aimed at obtaining new knowledge.
The search for alternatives for materials, devices, products, processes, systems or services.

If your business is undertaking R&D activity in relation to a specific project (even if the project is unsuccessful in the end) and the R&D activity meets the above definition of qualifying R&D, then you could be eligible for this additional tax relief.

Many companies carry out eligible R&D activities without realising that their work qualifies for this little known tax relief.

How can RDTaxCredit.org.uk help?

RDTaxCredit.org.uk help companies across all sectors with claiming R&D relief, leaving them with more cash to re-invest into their business. We have of experience in dealing with many transport companies.

Our Team of Chartered Tax Advisers ensure you have a robust claim that identifies qualifying R&D and the associated costs.

We can assist in preparation of the R&D claims and submission of the claim to HM Revenue & Customs.

We handle the R&D Claim from start to finish & we produce the technical report on your behalf that helps R&D Tax inspectors understand your work and approve the claim

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

If you would like to contact one of our experts for free initial advice, complete the quick enquiry form to receive a no-obligation review of your R & D Tax Relief claim.

January 18, 2019/0 Comments/by Samantha Holloway

Why your start-up needs to understand R&D Tax Credits

Business Tips, News, R & D Tax Credit

Ensure your company gets the best start by taking advantage of this government incentive.

Starting a business is one of the most exciting and exhilarating times in your life. Your business is your brainchild with all your efforts going into nurturing your ideas. It also takes a huge amount of courage and commitment to finally take the plunge into the start-up world.

Much of the planning of setting up your business will have been centred around branding, how the business will operate, what the website will look like, but not much thought will go into what the government can offer you as incentives. For some start-ups, the notion of R&D tax credits does not even cross their mind.

We are giving you the opportunity to learn about R&D tax credits so that your business gets the best possible head-start. With this government tax relief, you can give your new company a much needed boost.

Why does my start-up need R&D Tax Credits?

We don’t mean to scare you if you have just set up a company, but the fact remains that studies from Company House show 8 out of 10 start-ups fail within their first year. While the UK has become a hub of entrepreneurial spirit and flair, many companies find it tough in their first year due to underestimating competition and, crucially, a lack of financial planning.

One of the reasons start-ups run out of steam is running out cash. A key job of the business owner is properly prepare the business financially, to lead to a positive cash flow.

In a start-up it is fairly easy to focus on driving revenue and looking at profits, while ignoring the implications of insufficient cash resources. Cash flow management is crucial in ensuring employees and third-party suppliers can be paid, ensuring operations can continue undisturbed.

There is also a lot to think about when running a start-up. Hiring staff, buying supplies, working out the dynamics of your team, looking out for competitors. With all of this going on, R&D tax relief can seem like a bridge too far for many. Many entrepreneurs believe it is something to come back to when their business is further down the link. This is wrong, as R&D tax credits can get start-ups through that initial cash-flow rocky road.

What are R&D Tax Credits?

R&D tax credits, or research and development tax credits, were created in 2000 by the UK government to help small and medium enterprises (SMES) invest in innovation. This is due to the UK government wanting businesses to flourish and compete on a global scale.

Paired with special funding, grants, and various other hand-outs, R&D tax credits now help small businesses like yours put money into experimentation, research and development, without having to worry about the cost of any losses.

The relief works by either reducing a company’s liability to corporation tax or by making a direct payment to the company.

The research and development has to be focussed on advancing industry level knowledge. If the research could be carried out by a reasonably competent professional in that particular field, you may have trouble convincing HMRC of the validity of the claim.

This may sound like a difficult task. However, we have learnt through experience to teach SMEs and start-ups to never assume the work you are doing doesn’t qualify for the tax relief. Always ask a tax relief expert, as they may be able to identify some part of what you are doing that can attract help.

How much are R&D Tax Credits worth to my start-up?

A staggering £21.4bn has been claimed in tax relief since 2000, in the form of 240,000 claims.

Most start-ups would come under the SME R&D tax relief scheme. This means relief for start-ups can be as much as 230% of qualifying R&D costs if you are a small or medium sized enterprise. You can claim R&D tax credits on day-to-day costs and qualifying expenditure, including costs for staff, subcontractors, materials, software and utilities.

Even if your start-up is loss making, you can claim 14.5% of the loss as a tax credit. This equates to up to 33p for every £1 spent on R&D as a cash payment from HMRC. No start-up doing R&D work that might qualify can afford to ignore that sort of assistance.

In addition to this, and crucially, the work done on research and development does not actually have to be successful to qualify.

For 2016-17, £3.7bn was claimed by SMEs up and down the country, at an average of £53,000 per claim.

How can RDTaxCredit.org.uk help?

RDTaxCredit.org.uk help companies across all sectors with claiming R&D relief, leaving them with more cash to re-invest into their business. We have of experience in dealing with many start-ups across the UK.

CEO of rdtaxcredit.org.uk, Samantha Holloway, said:

Entrepreneurs and owners of start-ups expect to work hard for funding, so they can initially be sceptical about this benefit. They think it is too good to be true.

However, R&D tax credits are a legitimate government program that rewards investments in innovation. It is a benefit every start-up needs to know about.

Our Team of Chartered Tax Advisers ensure you have a robust claim that identifies qualifying R&D and the associated costs.

We can assist in preparation of the R&D claims and submission of the claim to HM Revenue & Customs.

We handle the R&D Claim from start to finish & we produce the technical report on your behalf that helps R&D Tax inspectors understand your work and approve the claim

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

If you would like to contact one of our experts for free initial advice, complete the quick enquiry form to receive a no-obligation review of your R & D Tax Relief claim.

January 10, 2019/0 Comments/by Samantha Holloway

Six crucial growth tips for SMEs and start-ups

News, R & D Tax Credit

Starting a business is one of the most exciting and exhilarating times in your life. Your business is your brainchild with all your efforts going into nurturing your ideas.

It can be a daunting time, however, with so many questions surrounding the running of the business.

SMEs and start-ups are the lifeblood of the UK economy, and up and down the country each one has a different challenge to tackle every day. Sometimes, we need a little help to grow our business.

Here, we are giving SMEs and start-ups the opportunity to read through our six thorough tips about how you can grow your SME, above and beyond.

Pinpoint your perfect customer

Identifying an ideal customer or client for your business is vital in making sure you do not stretch your business efforts too thinly across too many demographics. Knowing the perfect customer will give you tunnel vision in relation to all business activity, meaning you will be more likely to hit the right markets.

This can be in relation to how your brand comes across, how your website works, whether you have a client-facing store on the high street and, more generally, how your business is run. If you do not do this, you run the risk of getting your brand in front of the wrong people, at the wrong time, and losing potential sales.

A great way to find your ideal customer is to do create different “buyer personas”, in which you hone in on demographics and behaviours. In this process, you will go through where your perfect customer is likely to discover you, how much they are willing to pay for your service, and what their pain-points are.

Research your industry

Before your SME can grow, you need to know exactly where you stand within your market. Without doing proper market and competitor research you are shooting in the dark in relation to business goals and how to go about achieving them.

Researching competitors can give you insight into what works for them and what doesn’t. You can then take their good bits and make them better, and ensure you better them by removing the bad bits. Find holes in their products and services and highlight your products or services to potential customers as a better alternative.

Industry research, in a broader sense, can also bring key learnings to your business. Are there statutory changes coming into place that may affect the market? Perhaps there is a new technology that can enhance your industry that you are missing out on?

Constantly asking questions about your industry and competitors can mean you stay on top in the long term.

Create a purpose

When you first thought about starting a business, what made you excited about it? What made you take the plunge and put it all into your brainchild? Take that excitement and enthusiasm and run it through your business. Create the same passion you have for your business in your staff and your clients.

You can do this by creating a purpose for your business. Having a purpose not only makes marketing your business more coherent, but it can also influence business decisions, because it can reinforce them.

It can be as simple as providing enjoyable coffee to customers at a reasonable price, with a smile on your face. Or as complicated as creating new technologies to help the medical industry. Whatever your purpose is, always go back to it when you face questions about your SME.

This can also help create a strong culture within the company, ensuring staff have clear core values to adhere to.

Cash is King

This is one the first concepts you learn in business school. However, in an SME or start-up, managing cash flow is even more important. In an SME it is fairly easy to focus on driving revenue and looking at profits, while ignoring the implications of insufficient cash resources.

Cash flow management is crucial in ensuring employees and third-party suppliers can be paid, ensuring operations can continue undisturbed.

It is a good idea to maintain some cash reserves where possible. SMEs willhave cash shortfalls every now and then, that much is inevitable. However, depending on how prudent you have been in relation to cash reserves can determine how well you can manoeuvre those shortfalls

In addition to this, keeping a regular and updated cash flow spreadsheet and forecast can help SMEs predict any future problems that may arise.

Protect your business

If you own an SME, it is probably one of the most important aspects of your life. However, so many people overlook potential minefields and hazards that could bring their business crashing down.

While there are a whole host of things to protect against, the two main issues are:

Protecting your Intellectual Property

This involves anything that you have created in relation to your business. This could be business name, logo, website etc. By registering copyright and trademarks you can protect your creative works and ensure a potential competitor doesn’t steal any of your work. If you do have any IP that is valuable to your business, make sure it is protected.

Insuring your business

You’ve insured your car, home and pet, but haven’t insured your business? If something goes wrong, insurance can stop your business from losing huge amounts of money. This can include employer’s liability insurance, public liability insurance, professional indemnity insurance, and building and contents insurance. What type of business you own will depend on what insurance you need, but whatever you do, do not overlook this vital part of running a business.

Understand there is help for you

While running a business can sometimes be a lonely, unforgiving place, be reminded that the UK does want you to succeed and progress your business – You’re not alone.

The UK business community wants businesses like yours to prosper so the economy can grow. For this reason, there are numerous ways businesses like yours can get funding schemes and grants. These include Princes Trust Grants, Launchpad grant funding, Small Business Research Initiatives, Heritage Lottery Fund Start-up Grants and the Grant for Business Investment.

A rapidly growing scheme in this arena is the R&D tax credit scheme. The UK Government is aware that Britain is world-renowned for being a force in innovation and research. However, innovation is not cheap, so back in 2000 they introduced R&D tax credits.

These tax credits were put in place to encourage innovation in UK companies, in order to ensure they can compete with the biggest global superpowers.

A staggering £21.4bn has been claimed in tax relief since 2000, in the form of 240,000 claims. This amount has been claimed by SMEs just like yours.

How can rdtaxcredit.org.uk help?

This is where rdtaxcredit.org.uk come in. Our experts can guide you through the R&D tax credit process, taking you through the process of which grant is right for you, knowing what you can and cannot claim for, and being able to write the perfect technical narrative which is vitally important in the claim process.

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

Contact one of our expert advisers today for a free initial review, and see if you can claim back some much needed tax relief.

January 6, 2019/0 Comments/by Samantha Holloway

Report reveals R&D Tax Relief Claims are rising

News, R & D Tax Credit

If you are not claiming this Government incentive, the chances are your competitors are.

Last month the Government released new figures in relation to companies claiming R&D (research & development) tax credits, and the outlook is positive.

In the eighteen years the tax relief incentive has been implemented, there is an upward trend of UK businesses discovering and utilising the initiative. Over 240,000 claims have been made in that time – a total of £21.4bn being claimed.

What are R&D Tax Credits?

The UK Government is aware that Britain is world-renowned for being a force in innovation and research. However, innovation is not cheap, so back in 2000 they introduced R&D tax credits.

These tax credits were put in place to encourage innovation in UK companies, in order to ensure they can compete with the biggest global superpowers.

Paired with special funding, grants, and various other hand-outs, R&D tax credits now help businesses put money into experimentation, research and development, without having to worry about the cost of any losses. They work by either reducing a company’s liability to corporation tax or by making a direct payment to the company.

These tax credits can help companies of various sizes across different industries take on new innovations that can get new products onto the market, or re-invent existing products to make them more efficient.

R&D Tax Credit Claims are on the up

For 2016-17, 39,960 R&D tax credit claims were made, with over 34,000 of these being made in the SME R&D scheme. This figure is still incomplete, however. Due to the delay in reporting, this figure is expected to rise, meaning the amount will equal the highest ever tally in the 18 years since the tax relief initiative has been in place.

The Government report also hinted at businesses understanding the claims process a little more. The total amount of R&D support claimed by businesses actually increased by a staggering 25%. It would seem this was due to businesses having a better understanding of what they can and cannot claim for.

This brought the total claimed for 2016-17 to £3.7bn, an average of £53,000 per claim.

What kind of companies are claiming R&D Tax Credits?

The HMRC report shows that the sectors that benefitted the most from this tax relief in 2016-17 were:

Manufacturing;
Professional, Scientific and Technical;
Information and Communication

These sectors had the greatest volume of claims. Combined, they accounted for a total of 71% of all claims, and 75% of the total amount of money claimed for 2016-17.

However, this figure may be slightly misleading, as many more companies can, and do, apply for tax credits. Currently, the industries that can apply for R&D tax credits include, but are not limited to:

Audio and Visual
Building Technologies
Commercial Printing
Creative Digital and Media
Food and Beverage
Health
Manufacturing and Engineering
Marine
Motor Racing
Pharmaceutical
Software Development
Technology
Telecoms
Web Development

The tax relief also covers both SME and large companies, in all of these industries, with SMEs taking up the majority of claims.

Ensure your competitors aren’t getting one up on you

While the trend is positive, the report suggest many companies who are eligible are still not claiming R&D tax credits. There were nearly 7,000 first time applicants last year, and if your company was not one of them, your competitor may well have been.

Samantha Holloway, CEO of rdtaxcredit.org.uk, commented:

The outlook of these figures is undoubtedly positive, however there is still a lot to in relation to educating UK businesses about this Government incentive.
We often speak to business owners who simply have no idea this relief existed. If companies are not claiming this tax relief, they may not be innovating to the best of their ability.

How can rdtaxcredit.org.uk help?

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

Contact one of our expert advisers today for a free initial review, and see if you can claim back some much needed tax relief.

November 4, 2018/0 Comments/by admin

Figures reveal Northern Businesses are overlooking valuable R&D Tax Credits

News, R & D Tax Credit

New official stats show that an abundance of Northern SMEs could be claiming R&D tax credits, with an average benefit of over £50k

Running an SME can be hard at the best of times. Small business owners have to handle an array of challenges including selling, delivering, financing, managing and growing their brain-child with little or no staff, while trying to make it a success all at the same time.

It is, therefore, a very pleasant surprise to any SME owner when an unexpected advantage comes along. The latest advantage comes in the form of R&D tax credits.

R&D tax credits were created in 2000 by the Government as an incentive for companies to invest in Research & Development. A staggering £21.4bn has been claimed in tax relief since then, in the form of 240,000 claims.

This, however, is only scratching the R&D tax credit surface, as a new Government report has revealed that thousands of Northern England SMEs are eligible for tax relief and are still missing out.

The R&D Tax Credits Statistics

Statistics released a fortnight ago show that £350m of R&D tax relief was claimed by northern companies during the 2016-17 fiscal year. This represents a 19% increase in the previous year, indicating that companies are beginning to understand the tax relief a little better.

The Number of Claims – UK-wide

So far there have been 39,960 claims for 2016-17, of which 34,060 are in the SME scheme. The number of claims has plateaued from the previous year, but the figures are still incomplete.

It is estimated that claims for 2016-17 will increase once the all of the data has been compiled, meaning it will be the highest since the tax relief began.

The figures clearly show that the number of claims has steadily grown over the past 17 years, with an SME’s claim valuing almost £54,000 on average – an amount which would be invaluable to any business.

The Total Money Claimed – UK-wide

In all, Government stats show that, so far, £3.5bn of R&D tax relief support has been claimed for 2016-17.

It is estimated, with data revisions, that this will rise to the highest total the tax relief has seen in its eighteen years.

Regional R&D Tax Credit Statistics

In relation to Northern SMEs, there were a total of 7,305 claims, with a total value of £300m.

*Numbers: actual
*Amounts: £ million

The figures show that many, many more SMEs in the North West, North East and Yorkshire & Humber could be claiming R&D Tax Credit.

What’s the catch with R&D Tax Credits?

There are many SMEs missing out on RD tax credits for a number of reasons. Many northern SME business owners are simply unaware of the tax relief, owing to lack of advertisement and promotion.

Some are underclaiming due to a lack of comprehensive understanding about some of the subtle details of the R&D guidelines. In addition to this, some SME owners believe R&D Tax Credits are only available for traditional research sectors.

Many SME owners that we have come across simply think it is too good to be true, and there must be a catch. This is leading to many company owners missing out on this legitimate financial reward for their valuable investment within their industry. The Government itself says of R&D Tax Credits:

R&D tax credits are a tax relief designed to encourage greater R&D spending, leading in turn to greater investment in innovation. They work by either reducing a company’s liability to corporation tax or by making a payment to the company.

Samantha Holloway, CEO of rdtaxcredit.org.uk, commented:

We are speaking to lots of local small and medium-sized enterprises who are not aware of the money that they are owed.
The statistics show that less than five percent of SMEs that are potentially eligible to claim R&D tax credits have not made a claim.
We are looking to remedy this by educating businesses, and guiding them through the claims process, step by step.

How can rdtaxcredit.org.uk help?

At rdtaxcredit.org.uk, we understand that beginning to think about claiming R&D Tax Credits may be a little daunting. We want to help you through the process, to ensure you receive the financial reward that the Government wants to give you.

We offer a friendly and professional approach to R&D Tax Credits which includes:

A free no obligation initial review.
100% success rate
30 day quick turnaround

We also provide extensive information on our website should you wish to research R&D Tax Credits in further detail. We have information relating to individual industries such as:

If you would like to contact one of our experts for free initial advice, complete the quick enquiry form to receive a no-obligation review of your R & D Tax Relief claim.

Images sourced from:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/742661/Research_and_Development_Tax_Credits_Statistics_September_2018.pdf

October 25, 2018/0 Comments/by admin

If you are not claiming this Government incentive, the chances are your competitors are.

What are R&D Tax Credits?

R&D Tax Credit Claims are on the up

What kind of companies are claiming R&D Tax Credits?

Ensure your competitors aren’t getting one up on you

How can rdtaxcredit.org.uk help?

Contact one of our expert advisers today for a free initial review, and see if you can claim back some much needed tax relief.

If you would like to contact one of our experts for free initial advice, complete the quick enquiry form to receive a no-obligation review of your R & D Tax Relief claim.

Any questions? Get in touch today on 0161 531 0007.