Article prepared by Grant Laing.
Most businesses are being negatively impacted by the Coronavirus as a result of a reduction in sales, delay in payment of invoices and an overall increased uncertainty. Cash flow is, understandably, a key concern for the majority of companies with insufficient working capital and external/internal funding critical to ensure business continuity.
R&D INCENTIVES
As well as the whole host government grants that are being made available to businesses, one very well established way of generating extra cash can be the submission of R&D claims – these can result in direct cash payments of up to 33% of every £ spent on qualifying projects (e.g. salary costs, consumable costs, contractors’ costs). Plus unlike the new grants being issued as a result of COVID-19, R&D Tax Incentives have been well established for over 20 years with HMRC.
Many businesses may have not taken advantage of this – either because they thought they did not apply to them, or because it is too complex and the benefit is perceived as being small compared to the time and effort required.
LET’S DISPELL SOME MYTHS…
“We don’t do R&D”
Are you sure? The criteria for eligibility are very broad. ‘Qualifying activity’ is not limited to the obvious example of development of new products. It can just as easily apply to activity such as:
- overcoming technical problems;
- making improvements to existing processes.
- changing products or processes to be more efficient or more environmentally friendly;
- changing products or processes to meet new regulatory requirements; or
- building and integrating new IT systems.
“It will take too much of our time”
Amplifi Solutions have established processes which keep to a minimum the time you spend providing information. Our process typically takes less than 4
hours of your time and with the average claim being worth around £20K to a company, that is surely time well spent.
With significant experience within our team of working in both industry and HMRC, we know the pragmatic solutions that HMRC will accept – and we know how to be concise and clear while not asking for more from you than we need.
WHAT YOU CAN DO NOW?
R&D claims can still be made within two years of the end of an accounting period. This means that, for example, a company with an April year end can still make claims for the year ended 30 April 2018 as at the date of writing. This means a benefit is being derived for expenditure incurred as far back as 1 May 2017 and claims are typically paid in 28 days.
There has never been a better time to reassess your eligibility for research and development incentives. For many companies this an untapped source of ready funding, paid in cash to support your ongoing activities. Amplifi Solutions are offering Edinburgh Connect members a free consultation. For more information on R&D tax Incentives contact our team or contact Grant Laing on glaing@amplifi.solutions
