Many small and medium sized businesses continue to under claim for R & D Tax Relief why is this still happening?
Many have said to us it is “Because we are not sure of the rules, and neither it seems are our accountants”
There are four critical rules to be considered when deciding if you have a valid claim, they are
Are you taking the financial risk in your development programs?
Does what you are developing involve science or technology?
Are there any technological or scientific uncertainties at the start of your projects that require trials or testing to be sure that they are resolved?
Are you seeking to achieve an advance in science or technology?
The risk is fairly easy to understand, is your business spending money to develop something new?
Science or technology can be technical equipment, software, production processes, clever tooling developments, even web based improved business processes; in fact anything that is based on conventional sciences or technologies.
The uncertainties are trickier to determine and this is where a specialist can advise you. It means that someone who knows what he is doing still needs to conduct trials or tests.
The advance again requires some specialist advice. Essentially, if you can say “it used to be done this way but our new solution makes it demonstrably better”, then you’re on the right track.
When it comes to deciding whether you can claim, you really need to talk to a R&D Tax Relief specialist because three of the four rules are often outside an Accountants area of expertise.
It should cost nothing to arrange a preliminary discussion with an R&D Tax specialist and make the informed decision whether or not to claim. After that, ask your own Accountant what’s it worth in cash, corporation tax credits or carried forward losses.