R and D Tax relief for an Electronics Manufacturer
Date: 22nd March 2013
We’re an Electronics Manufacturer – should we be claiming R and D Tax relief?
Almost certainly yes! Just ask yourself these questions:
Do you carry out development work in order to win sales?
Do our designs present us with some uncertainties at the outset?
Do we spend time testing, trialling or solving these uncertainties?
Do we spend pre-production time creating a manufacturable product from the bench design?
Are our designs innovative, in our opinion?
Are we trying to remain competitive and stay ahead in our technology?
Do we make bespoke electronics solutions, batch produced equipment or perhaps volume assembly?
Do we use subcontractors?
Do we integrate equipment?
If some of these questions reflect your business, then don’t delay…you should be seeking advice on your R and D Tax relief eligibility.
How do we find out whether we can claim?
It’s straightforward. Ask an R and D Tax specialist. The reputable ones don’t charge for eligibility queries and the good ones will even scope out what your claim is likely to be worth, before you decide.
You should be properly informed before you can make a claim/no claim decision.
How much will it cost me to claim?
Once it’s clear that you should claim, your Tax Specialist earns his money by helping you to maximise your claim and preparing the Technical Justification for HMRC. Most offer you a fee which is contingent on success and a competitive rate of your successful claim.
Some firms push you to use their associated accountant and can charge 20% upwards. It’s quite unnecessary and your own business accountant is perfectly able to submit the claim for you.
How much do companies benefit from R and D Tax relief?
If this is your first claim, then you are allowed to claim a rebate for corporation tax which has been overpaid in the previous two years. This is paid as a cheque and HMRC are quite nippy. They typically take 28 days to settle straightforward claims.
You can claim a reduced payment even when you made losses. Recently, the Government has eased some of the regulations, presumably to encourage R&D.
For your current year, the claim will reduce your corporation tax bill or it can be taken as cash.
The average SME claim is around £40K according to HMRC statistics. It soon mounts up, especially with the year sated two years.