How Can A HMRC Tax Specialist Help Your Business Claim R&D Tax Relief?

by Areande Tax Company Areande Tax Relief Company

Every year millions of small businesses miss out on unclaimed research and development (R&D) tax relief, however, a HMRC Tax Specialist could put a stop to this.

The government introduced the R&D tax relief scheme in 2000 to encourage scientific and technological innovation in the UK for small and medium enterprises (SME). They are a valuable source of cash for businesses to invest in accelerating their R&D project, hiring new staff and ultimately growing.

However, research suggests that less than 1% of SME businesses submit claims. This could be due to the lack of awareness and active publicity on the scheme, but if you can claim an extra corporation tax deduction for your business, it’s a no brainer.

Companies who are actively spending money developing new products, creating new processes or services; or enhancing existing ones, are eligible for R&D tax relief. Spending money on your innovation means you will be able to make a claim and receive a cash payment or a corporation tax reduction.

How do you know if your business is eligible?

It is very clear that HMRC will only accept your application following a vigorous test to see if your business can claim R&D. Many businesses are eligible however, the government is encouraging companies with backgrounds in life sciences, food and drink and software development to claim R&D tax relief.

If you are creating a new drug, developing cutting-edge technology, or finding ways to boost the food industry, claiming tax relief is a great way to generate cash for your business. Essentially anything that helps you gain a competitive advantage in a new and innovative way could be eligible for tax relief.

UK tax laws around R&D tax relief are complicated and the criteria to match these can be equivocal. In order to get the best tax relief return, having a HMRC Tax Specialist on your side will guide you to the best possible outcome.

How can a HMRC Tax Specialist help?

Having to fill out a tax return is not the best use of your time as scouring through company accounts could take up hours. A HMRC Tax Specialist can help you discover tax incentives for your business without the hassle and the all-important paperwork.

In the Spring Budget 2020, the Treasury revealed plans to make tax go digital. In these plans, businesses will have to file tax returns four times a year by April 2022. This means you could be spending more time away from your innovation. Working with a HMRC tax specialist would remove all of the kerfuffle and let you focus on your important research.

A tax specialist can also scour your accounts to find what assets are eligible for R&D tax relief. From direct staff costs to software and consumables that were used in the R&D process can all be claimed. SME R&D can deduct up to 230% in tax relief and businesses can claim up to 14.5% of their money back if they are losing money.

The specialists are committed to ensuring you have a smooth claims process, minimising the disruption to your day to day activity, so you can get on with running your business. They are skilled at processing these claims and will dedicate their time to resolve your tax claims.

What are the benefits of claiming R&D?

The average SME in 2017-18 claimed £53,714 in tax credit and paid a total of £4.3 billion in claims. This is a huge amount of money for small businesses and it could grow your business significantly. Despite the economic downturn during the Covid 19 pandemic, the government wants to see increased productivity from these types of businesses mentioned above. It can also lead to innovation that can fuel positive change on a global scale, not just getting the UK economy back on track.

· Your company can acquire patents for new products you have designed and developed which will stop competitors from trying to copy them. This will not only give you an advantage in the market but could see higher long-term profits.

· The whole point of R&D tax relief is to claim back on what you spend on the project. So your company can claim expenses such as manufacturing costs, and paying staff.

· Annually over £30bn is spent on innovation in the UK so it’s fair to say it’s a costly industry to be in. Ensuring your company can raise the funds to start your R&D activity is crucial. Even if you are losing money, you can claim relief. Doing this could lead to more investment from investors if they hear you’re committed to innovating.

There are nearly 4.4 million companies in the UK and HMRC only receives approximately 50,000 claims per year. That means there are a lot of businesses missing out! Are you one of them? You can check your eligibility with Areande and see how a HMRC Tax Specialist can help you.