Do you run an innovative business or project? Did you know that these innovations could come with a financial perk of tax credits? The Research and Development (R&D) tax credits scheme is there to help benefit your business.
What are R&D tax credits?
R&D tax credits are a government incentive to encourage innovation within business. They reward companies that invest in developing new products, processes, or services, or even improving existing ones. This can span across various sectors – from engineering to software design, and anything in between.
How do these credits translate into benefits?
There are two main ways companies can claim tax relief:
Enhanced Corporation Tax Relief: For small and medium-sized businesses (SMEs), this translates to a significant boost. Qualifying R&D expenditure can be deducted at 186% from your taxable profits! This effectively reduces your corporation tax bill.
Tax Credit Payments: Even companies making a loss or with no Corporation Tax liability can benefit as the scheme offers a payable tax credit, essentially a cash payment from the government.
The financial boost to your business can be used to fuel further innovation, expand the team, or simply improve your cash flow. Considering the potential rewards, it’s definitely worth exploring whether your projects qualify.
How do you qualify?
Your project needs to demonstrate a scientific or technological advancement and involve overcoming uncertainty.
You can find out more about the scheme and what projects can qualify here.
Greenwood Tax and Accounting have over 20 years’ experience in working with a wide range of businesses, from start ups, sole traders, landlords and limited companies. We offer bespoke services that are tailored to the needs of you and your business.
Book a call with Kathryn today to find out how we can help you.
