Have you claimed R&D tax credit for your business? It is extremely likely that you have NOT claimed what you are due or claimed significantly less than that for which you are eligible.
How can I say that with such assurance? Because, Government statistics show that ONLY 4% of eligible businesses have claimed tax back for process improvement, or products, systems and material improvement.
Why Do Small Businesses Not Claim R&D Tax Credit?
It is quite common that many accountants making the claims look at the costs in the accounts and decide not to make a claim on the amount. This practise means you miss out on tax rebates and the many expenses that could be reimbursed, simply because they were overlooked. What’s more, it results in you getting substantially less tax back for improving your processes, systems, products, and materials.
Most of the time, the reasons for not claiming SME R&D tax credits by small businesses is not being aware of the entitlement. It could also be not understanding what the circumstances are under which you can get a tax credit.
No matter what the reason, the result is, SMEs are losing out significant amounts of cash that can be claimed back.
Can You Get a Small Business R&D Tax Credit?
In order to be eligible for the R&D tax credit scheme for SMEs, you need to:
- Have a business with up to 500 employees
- Have less than €100 million turnover, or up to €86 million in assets
If you meet the criteria, you can claim R&D tax credits of up to 33c for every €1 invested. What’s more, you can also claim tax back for up to two to three accounting periods, depending on timing. That means you can claim tax credits for up to two previous periods in addition to the most recent one.
Moreover, claims can be made for:
- CRM, e-commerce improvements and plans
- Previous internal software and hardware improvements
- Previous or future production improvements
- Manufacturing improvements or product development
- Improvements to the supply chain
- Improvements in stock control systems
- Hardware purchases relating to process or production improvement
- Innovative ideas for saving materials or reducing waste
Additionally, very few companies realise that the cost of the time spent on projects by employees, including meetings, can be added into the claims, as well as purchases, external costs and consultancy.
Did your business invest in any projects like this in the last few years? If yes, you could be eligible for an R&D tax credit and, with the average reclaim being around £55,000 for just one period, you could inject some much-needed cash back into the business.
If you believe that you are missing out on reclaiming valuable cash then please let us know and we can organise a no-obligation call and/or video discussion to see if we can assist.