30th March 2019 Posted by - Alexander Accountancy
As a smaller business, it often feels like the government support and assistance is aimed at the larger companies that might have a political influence, and smaller companies don’t count. There is one tax benefit that is not only available to all sizes of companies but is actually more generous to smaller companies than larger ones!
It encourages companies to develop new technology, to take risks to make themselves and in turn the country more successful. It’s called Corporation Tax relief on Research and Development. It’s in the Budget each year, so it’s safe to be claiming. Most importantly, SMEs get back around 25p in tax for each £1 they have spent on development, which includes salaries and getting help from other companies.
“But I don’t do research and development.” If you are developing products, technologies, processes or software then you might be. Some examples –
A software development company builds websites and develops the technology that powers those websites, from database management to interacting with other pieces of software.
This company makes manually intensive processes much faster and more efficient by using robotics and complex systems of conveyors, sensors and computer controls.
You need to be solving problems, and the work needs to be directly on technical development. Creative work like graphic design isn’t eligible, but what you spend on people, materials and sub-contracting all counts.
“I don’t pay corporation tax at the moment.” You can claim if you are loss-making or profitable, and claims can go back two years, which might cover a year where you had a big tax bill to pay.
“That sounds difficult to get.” It’s a complex area of legislation, so HMRC has specialist units set up to review claims. Don’t worry – we can help you determine if you are eligible, and do all of the work for you, typically resulting in a payment direct to your bank from HMRC.
Is it worth it for you to look at? Well, if you are solving problems for yourself or your clients, then it’s reassuring that there is the support to pay for your hard work. As business gets ever tougher it’s wise to look at where you can be getting support, and a few thousand pounds in cash back from HMRC is certainly worth looking at.
Call Alexander Accountancy on Burton upon Trent 01283 743851 or
email firstname.lastname@example.org to discuss how this could help your business.