How to ace R&D tax relief for your business
If you run an innovative business and are considering R&D tax relief, now is a great time to claim. Providing you qualify for them, read on to learn how to claim tax credits and succeed.
The number of R&D tax credit claims is increasing. Between 2016 and 2017, businesses claimed an impressive £3.5bn, according to statistics from HMRC. This money stimulated further R&D investment – worth £8.2bn. While SMEs are certainly utilising this relief, most make only small claims, with 75% claiming less than £50,000.
R&D reliefs exist to support businesses working on innovative projects that push the boundaries of particular technological or scientific areas. Companies in a wide range of industries can claim for them, even on unsuccessful projects. Government guidance R&D reliefs will clarify whether you can claim for them.
The reliefs are well worth considering for profitable and loss-making SMEs alike. Profitable SMEs can use them to reduce tax liabilities by 25% of their qualifying costs. Similarly, loss-making SMEs can claim a tax credit cash repayment of up to 33% of their qualifying costs.
SMEs that receive R&D funding can even claim a net tax credit repayment, worth 10% of qualifying costs.
How Prosper² can help
Prosper² is keen to ensure its members maximise their R&D tax entitlements. We have therefore introduced a service for members to determine whether their businesses are eligible to claim under R&D tax criteria.
You can find the Research & Development Tax Credits Eligibility Assessment in the Reports section of the Service Hub. Click here to find out more.