Is your business eligible to claim R&D Tax?
If you’re among those businesses currently claiming tax credits for research and development activity, you’ll be aware of the rewards available. If, however, you’re in the majority and not yet taking advantage of the Government-led scheme, identifying whether you qualify should be high on your list of priorities.
So who actually qualifies for R&D tax credits and how can you determine whether the scheme is worth pursuing? Take a look at the five key signals that will help establish if you should begin the process of claiming the tax credits available.
1. You work in a thriving R&D industry
It almost goes without saying that companies engaged in scientific or medical markets will often be eligible for R&D tax credits due to nature of the work they conduct. But did you realise that opportunity to claim extends far beyond the reaches of these two disciplines? For any business that is looking to ‘to achieve an advance in overall knowledge or capability in a field of science or technology through the resolution of scientific or technological uncertainty’, R&D tax credits can be claimed. Some of those industries currently thriving in R&D activity include manufacturing, software development, engineering, agriculture and biofuel.
2. You’re problem solving
As identified above, the purpose of R&D tax credits is to reward those businesses looking to advance overall knowledge. In other words, if your business is focused on resolving problems through the development of innovative solutions, you may well find yourself eligible to receive the benefits offered through R&D tax credits. The key to this requirement is being able to demonstrate that your solution is one that resolves difficult technical problems for the benefit of others as well as yourself.
3. You’re improving other products
It’s never easy coming up with something totally new. But improving on others’ past work is what drives technological industries to ever-new heights, and deserves equal reward for the development and research that is invested in optimising solutions. Supposing your company has taken the framework of a piece of software but reengineered the code in order to provide a scalable, more efficient, and more practical service. While the initial concept may not have been your own, it has been your time and money invested in improving the product into something that surpasses the original.
4. There is large-scale investment in projects
Could it be so obvious that, if your business is in the process of investing resources in major projects, your are conducting relevant R&D for the purposes of tax credits? Put simply, yes. If your outgoings are paying salaries or material costs for the sole purpose of a particular project, it could be the case that such work falls into the criteria for R&D tax credits.
5. You outsource to specialists
It’s a little-known fact that even money you pay to those with expert and specialised knowledge outside your organisations – and, even, outside of the UK – can help qualify you for tax credits. Of course, it’s essential that these experts are being recruited or commissioned because of this expertise. By doing so, they could help your company qualify on the basis that they will be supporting the ‘advancement of knowledge’ and the ‘resolution of technical difficulties’.
Identifying whether you qualify for R&D tax credits demands close analysis of your day-to-day work activities. One of the best ways to determine your eligibility is to work with an impartial yet experienced third party who will be able to resolve the question. At R&D Tax Solutions in Manchester, we can help support your business in processing R&D claims, where applicable. Call us today on 0161 298 1010 to find out more.