Returning to Work? Make it Right. R&D Tax Credits

 The Great Return to Work

So, very shortly you’ll be returning to the daily hustle and bustle of office life. As productive as you may have been working remotely, sometimes, nothing beats being hands-on with an ear to the ground and your finger on the pulse.

The COVID-19 pandemic of 2020 has reasonably caused many of us to reflect on our personal productivity and output; both professionally and personally.

In many ways, the world stopped in motion; however, it has given us the opportunity to reset, re-evaluate and redesign the ways in which we work.

Did You Know? R&D Tax Credits Could Help You

Did you know that you may be able to claim tax relief on your Research & Development (R&D) expenses? Believe it or not, many small-and-medium enterprises (SMEs for short) are remain unaware of such a helpful scheme.

For perspective, on average, SMEs claim approximately £50K per year utilising R&D tax credits.

If you haven’t already investigated the potential benefit to your business under the R&D tax credits scheme, make the return to work your opportunity to make it right.

Tell Me More! The Details R&D Tax Credits

The scope of the R&D tax credits scheme is vast and wide.

Theoretically, the diversity of industry sectors it covers are endless. So long as your business is registered as a limited company within the UK that is subject to Corporation Tax and you have traceable expenditure on R&D, the scheme may be of benefit to your business.

Okay... I think I Am Eligible. What is R&D?

Put simply, R&D is the procedure in which a company may innovate or reformulate products, procedures or services.

This process can be in the design and development of new or existing products and services.

Yeah! My Business Conducts R&D. What Things Should I Highlight?

You will be happy to know that the costs that may reasonably attributed to R&D expenditure are surprisingly vast and robust. Staffing costs (including that of admin) may be included within the calculation provided they are in direct support of the project.

So too are the cost of raw materials, utilities and other consumables.

For the benefit of R&D tax credits, some software license may be included within the R&D tax calculations. There are limitations to which software licenses may be included for the relevant calculation; however, as computer aided technology and software becomes more integral to business – as well as the increasingly more common remote working options – it does seem that such limitations will become more robust and bespoke as time goes by.

It must also be noted that to make benefit of the R&D tax credit scheme, such expenses must be attributed to the R&D of goods, services or processes that may benefit your industry sector, and not limited to solely your own business.

Just So I Know…What Can’t I Include?

Great question!

The Government has given succinct guidelines as to what cannot be included within an R&D tax credit claim. They are:

·         Capital Expenditure

·         Production and distribution of goods/services

·         Any costs relating to the purchase of land and rent/rates

·         Any costs of trademarks and patents.

Great! What Shall I do Now?

Well, the first priority would be to look at your business model and determine whether you have conducted R&D and what costs can be attributed directly to that.

The scheme is used to reward innovation and improved output, so it is advisable to make use of the assistance available.

Here at Areande, we specialise is assisting businesses make the most of their innovation expenditure and R&D tax relief.

Get in touch with our expert team today.