I’m a Recruitment business and I’m claiming R&D Tax Credits
Date: 30th November 2016
There is a common misconception about R&D Tax credits. It doesn’t have to be rocket science; in fact, non-technical companies like mine can also make a claim and significantly reduce corporation tax. It’s about investing in software based applications or processes to make my services more efficient and therefore more competitive, year on year.
Non-technical companies like mine can claim
There are some straight forward rules:
- You must being using Science or Technology, software in our case.
- There must be uncertainties to overcome; trialing to overcome these is a good sign.
- There must be a technical advance, not necessarily rocket science but rather a distinct and unique improvement on what’s currently available.
- There was risk involved in developing the solution. You are footing the bill regardless of the outcome, is a typical scenario.
In our case, we wanted a much better database management intranet and we invested in externally written bespoke software to achieve this. We had to trial the solution that we specified and paid for, and then integrated it into our existing processes.
Now let’s see how the rules apply; software is technology and when creating the application, there are often many uncertainties to overcome. Our new solution provides functions which others in the market don’t incorporate, and that’s a technical advance. We paid a subcontractor to do the development and then we extensively trialled the application, in house, involving many hours of our IT and office staff.
Does this sound familiar? Then it could be well worth inquiring to see if you’re also eligible to make a claim. It can be a very useful cash injection into your business and you are able to reclaim costs incurred for the last two financial years, plus your current year. The rebate goes straight to the bottom line. No further tax costs are applied.
The best way to check out your eligibility, and how much it’s worth, is to ask an R&D Tax specialist. A reputable one will not charge you for this initial advice. They earn their fee by writing the Technical Justification which accompanies the claim, normally submitted by your own Accountant, and by helping you to maximise your claim by including all the qualify costs. Overall, it shouldn’t cost you more than 18% of the successful claim value and most R&D Tax Credit specialists charge on a contingency success basis.
HMRC are very supportive and target to process your claim within 28 days from submission of your claim by your own accountant.
Jaime Lumsden, Director