Claiming for R&D Tax Credits if your a Loss-Making Company 2018-03-18T14:10:49+00:00
loss making company

R&D Tax credits for unprofitable SMEs

Rewarding innovation is essential to the continued development of forward thinking solutions and ground-breaking technologies. Pioneers in the world of research and development, however, may seek different rewards from the financial kind, meaning many Small and Medium Enterprises (SMEs) prove unprofitable in their day-to-day work.

The introduction of HMRC’s R&D tax credits in April 2000 enabled many businesses to benefit from government remuneration for their pursuit of scientific and technological advancement. Thousands of companies – including those which are loss-making–are now able to take advantage of credits, relief, and even cashback when a qualifying research and development project is undertaken. For those running at a loss, such an injection could prove a valuable lifeline for the continuation of work.

Cashback for loss-making SMEs

It’s a common misconception that, in order to take advantage of R&D tax credits, you have to be profitable for them to be worthwhile. The reality is much different. If your business’ research and development project demonstrates that ‘a scientific or technological advance is being sought’, you may be able to offset  losses made against the amount of expenditure on the project. Such benefits could indeed be significant.

For instance, as a loss-making SME, you have the opportunity to surrender the loss that relates to the R&D activity for cash – a payment currently equivalent to £33.35 for every £100 of R&D spend. This amount could prove to be the difference between another year of work or company liquidation.

Is your business eligible to make an R&D tax claim?

Criteria exists to help businesses determine their eligibility for an R&D claim. The key condition is that the innovations benefit the industry as a whole, and don’t simply result in commercial gains for the company that undertook the project.

On the whole, it’s advisable to liaise with experienced R&D tax credit specialists when determining the eligibility of a claim. This will provide you with any  necessary information about the relief available, as well as an impartial assessment that determines both your eligibility and the likelihood of a successful claim.

Discuss your claims today

Regardless of the financial position in which you find your business, if you are able to demonstrate clearly that you fulfil the given requirements, you have the opportunity to receive the tax credits you need to continue performing innovative research and development work.

For more information on how to successfully make a claim for your SME business, get in touch with the team of experienced experts at R&D Tax Solutions today. Simply complete and submit an online enquiry form, or speak to one of our friendly team members by calling  0161 298 1010. We look forward to helping you receive the tax rewards your R&D work deserve.

Average R&D tax claim is £56,000

Ask us to review your R&D tax relief claim on your behalf. With our unique fee strcuture you don't pay us a penny until your R&D claim succeeds and provides a benefit to your business!

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