Research and Development (R&D) Tax Credits are a government incentive that is all about rewarding innovation to fuel growth of business.
In essence, they are a source of cash for businesses to use to accelerate R&D to drive growth.
So how do they work?
When you invest in new product development, processes or services; or you invest in enhancing existing ones, you could be eligible for tax relief. This can be as a cash payment and/or offset against your corporation tax. In addition, claims can be made for the last two accounting periods, meaning you can claim for historical investment too.
Ben Eley, partner at Birmingham Accountants Barnett Ravenscroft, commented
“ In January 2020 alone our clients have claimed around £65k back in R&D tax credits.
This kind of relief can make a huge difference to a growing business, enabling further investment in innovation, staff and processes to fuel growth. The scope for R&D tax credits is huge and so businesses across most sectors can take advantage of it by investing in innovation.”
To be eligible you should:
- Be a limited company in the UK that is subject to Corporation Tax
- Have carried out qualifying research and development activities
- Have spent money on these innovative projects
If you have questions or would like to explore whether you can claim tax credits then please get in touch with our expert team today.
