11th September
Thousands of companies are benefiting from research and development (R&D) tax credits, according to new figures from HM Revenue & Customs (HMRC) released earlier this year.
The figures showed that the total paid out in tax credits since they were introduced in 2000 was nearly £5 billion.
“Cowgill Holloway has helped clients reclaim in excess of £2m to date, proving that there are significant financial advantages to be made from making a claim,” says Andy Ball, tax partner at Cowgill Holloway.
Andy continued: “The types of activities that qualify for R&D tax relief cover a broad spectrum and can be challenging for businesses to apply in practice, so it stands to reason that any company seeking to gain maximum benefit from tax credits in this field will need specialist advice in order to recognise the potential, fulfil the conditions involved and calculate how much relief can be claimed under the scheme.”
Qualifying R&D is work which is aimed at achieving an advance in science or technology through systematic investigation which seeks to resolve scientific or technological uncertainty. A technological or scientific advance might be a new or improved product, process or service.
The SME scheme applies to businesses with less than 500 employees and offers higher rates of relief than the large enterprise scheme. Subject to State Aid Approval, the 2011 Budget made announcements to increase the relief to 200 per cent, meaning that for each £100 of allowable costs, a company’s profits on which Corporation Tax is paid could be reduced by an extra £100, in addition to the £100 already spent.
“In some instances, for our clients, R&D credits are more than just a tax incentive, they can provide a valuable source of funding because they find themselves in a loss situation and can surrender the loss in exchange for a cash payment,” Andy concluded.
Subject to State Aid Approval, changes introduced in the 23 March Budget mean that the tax relief will become even more attractive to small companies, with the rates rising to 225 per cent from April 2012.
Cowgill Holloway has a dedicated R&D tax credit unit. This highly motivated team pulls together the experience and specific specialist skills in tax, accounting and audit that are necessary to identify and successfully manage R&D claims. For more information please contact Andy Ball.
Disclaimer
The information was correct at time of publishing but may now be out of date.
