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R&D Tax Credits Training Course


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Thousands of companies are missing out on significant
tax savings

Recently I spoke to Richard Edwards, Director at Jumpstart, one of the UK's leading R&D Tax Credit specialists. I asked Richard why there is such a surprisingly low number of R&D Tax Relief claims made.

What Richard explained is that many companies find it difficult to recognise that they have the basis of a claim. There is often a misunderstanding as to exactly what constitutes R&D and many wrongly assume that only companies in particular sectors are eligible for the relief. Research and development is to ‘seek an advance in science or technology through the resolution of scientific or technological uncertainty’. This definition can easily mislead people into assuming that R&D tax credit eligibility is focused around companies with formal R&D functions - but this is not the case. Quite simply, if you spend money trying to improve your products or services, and you have overcome significant new challenges to do so, then you could be eligible for the scheme.

Are you eligible for R&D Tax Relief?

I asked Richard how Jumpstart begins to work with companies to find eligible projects. He said that they start with 5 simple questions. If they say yes to any of them, there is a good chance that the company is eligible...

Within the last two to three years have you:

  • used technology to develop new products or services?
  • tried to improve existing products or services by making technical changes?
  • resolved technical problems with any of your products or services?
  • found more efficient ways to produce your products or services?
  • experimented with new equipment or new processes?

According to statistics published by HMRC, the number of companies that benefit from these schemes has been growing but surprisingly there are probably no more than 40,000 companies that have made claims over the 15 years that the schemes have been operating. Having said that, these companies have shared approximately £10 billion worth of tax savings - each company, on average, has obtained £250,000 worth of tax relief.

So, what is the benefit?

The figures will vary depending on many factors, particularly the size of your company. There are separate schemes for SMEs and Large Companies - SMEs being companies with up to 500 people and revenues not exceeding €100m or assets not exceeding €86m.

Simply speaking, if a profitable SME spent £100,000 on eligible work after 1 April 2015 it would receive up to £26,000 as an R&D tax credit.

What to do next...

If you answered ‘yes’ to one of Richard’s 5 questions then your company could benefit from considerable tax savings.  Remember that claims can be made up to two years after the year end of the year in which the money was spent. Richard will be presenting a practical half-day course during the afternoon of 18th November which will explain how your company could make a successful R&D tax relief claim.

For details of the course please visit our website.

Stephen Smith
Managing Director
UK Training (Worldwide) Limited

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