We are often asked about the terminology surrounding R and D Tax Credits and understanding terms and definitions involved when tax planning could be critical to your business and Research & Development taxation is one of these areas to review.
If you are developing products and processes they may be eligible for significant payments of cash through the Research & Development (R&D) Tax Credit regime. The definition of R&D is much wider than most people think and that is why opportunities to claim are often missed by business owners.
Most businesses do not claim this valuable relief because the words ‘Research and Development’ are synonymous with laboratories, new research establishments or novel and innovative concepts. This is most certainly not the case and the variety of business that can receive these refunds is quite extensive and this can lead to missed opportunities for business owners.
A company must show an “advance in technology” to qualify, but this could be simply reducing cost, weight or size… it does not mean you have to be making ground-breaking changes.
If your company has invested in developing new products, processes or services you could qualify. Examples of some of the businesses sectors that could be eligible would include companies engaged in the following activities, IT advances or innovation, some types of software or web development, telecommunications, recycling, health and media.