As a business owner, you may be looking for possible tax relief in order to breathe easier during this challenging time. While you may have exhausted all conventional methods, have you considered SME R&D tax credits? If you’re a small or medium-sized business that churns out innovative ideas daily, take a look at how you could be entitled to tax relief.
What is an SME?
The hmrc tax specialist for a small
and medium-sized enterprise (SME) for the purposes of Research and Development
(R&D) Tax Credits are:
·
Fewer than 500 employees, as well as either:
·
An annual turnover of under €100 million, or
· A balance sheet of under €86 million.
Because the SME definition was written by the European Commission, all you need to do is convert your sterling values into Euros in order to understand if your business fits the criteria.
If your company checks these boxes, then you may be eligible for SME R&D tax credits. If not, then your business may fall under the large company criteria and be able to claim under the sme r&d tax credits.
What Are SME R&D Tax Credits?
The R&D relief supports businesses that work on innovative projects in science and technology. The UK innovators find breakthrough solutions, shaping the world of business for today - and tomorrow. If your business is working on a specific project that will make advancements in the science or technology sectors, then you may be able to claim relief to support your funds.
SME R&D tax credits
allow businesses to:
·
Make a total 230% deduction. The program
allows businesses to deduct an extra 130% of their qualifying costs from their
annual profit, in addition to the standard 100% deduction.
· Claim a tax credit if the business is currently making a loss. This can be worth up to 14.5% of the loss.
How Can Credits Be Claimed?
You generally have two ways of claiming back the SME R&D tax credits. You can either use them to obtain a reduction in your company’s liability or choose to receive them as cashback. These credits help to lower the inherent risk associated with innovation and development. Since many companies across a wide range of sectors do just that as part of their daily operations, making an R&D claim is a no-brainer to collect.
The government put this support in place to increase the R&D base by reducing the cost of corporate R&D in order to encourage more growth and investment. In turn, this would increase innovation and wealth to improve the economy.
An Investment Worth Making
If your business is
classed as an SME for the R&D tax credit, then your next step will be
filing a claim via the SME R&D tax credits scheme. Even today, many
businesses miss out on tax relief because of myths and misunderstanding. Don’t
let this opportunity pass you by. Take advantage of this scheme by working with
the professionals who can guide you through every step of the process. At Areande, we can help you make the most of each
claim. Contact us today to get started on the SME R&D tax
credits process.
