Innovation is a key aspect of all businesses. Regardless of your industry or size, innovation is an important part of growth but is often overlooked due to the financial risks that are typically associated with it. However, despite the Government’s tax incentives, many businesses are missing out on being rewarded for their innovative activities by claiming R&D tax credits.
We spoke to Recoup Capital, a team of R&D tax specialists, to find out why more UK businesses need to wake up to R&D tax credits.
What are R&D tax credits?
R&D tax credits (Research and Development tax credits) are part of a scheme outlined by the UK government designed to encourage companies to invest in R&D and innovation. It is through this scheme that businesses can receive a cash payment and/or a corporation tax reduction.
How you qualify for an R&D tax claim varies depending on the industry you’re in. For example, if you release innovative products, or undertake innovative processes or services in your sector, you could qualify for R&D tax credits.
For companies within the construction industry, qualifying activities include groundwork and foundation issues and activities taken to enhance a building’s levels of energy efficiency.
Why are R&D tax credits not being claimed more?
It appears that there is some confusion around the claims process for R&D tax credits and how they can benefit a business. Although a claim can be submitted very easily with the help of an R&D professional, in most cases funds are received back within four to six weeks of submitting a claim.
Having the funds processed and returned in such a fast manner can be hugely valuable to businesses in mitigating the financial risk of investing in innovation. And yet, so many are not utilising what is openly available to them.
At Recoup Capital, they believe that there are a lot of misconceptions around what qualifies as R&D activity. Recoup wanted to elaborate a bit more on the qualifying aspects of R&D to try to demystify the confusion and misconceptions around it.
R&D activities are defined as any aspects of innovation in your business across new products, services, or processes. To put it plainly, if you’re spending funds on innovation, you will most likely qualify for an R&D tax claim.
How to navigate your R&D tax claim
To make the most of the UK R&D tax credit incentive, an open mind is required. You’ve got to keep an open mind about what qualifies as R&D. The broadness of the term used is intentional to allow it to apply to various industries, so be sure to remember this.
When it comes to applying for your R&D claim, don’t be afraid to seek help on this. Using R&D tax specialist companies is a great way to easily go through this process and make your claim in a stress-free manner.
Take Recoup Capital for example. They have an excellent R&D eligibility checker on their website that allows you to see if your business qualifies for R&D tax credits.
R&D tax specialists can make the R&D tax credit claims process completely painless. Often, all that is required is your financial information, such as your full accounts for the last two years, and they will do the rest.
More UK businesses need to wake up to R&D tax credits as they are missing out on a whole area of funding that could make a big difference to their company. Get in touch with experts like Recoup Capital and see whether you qualify for R&D tax credits.