Businesses are being urged to see if they qualify for a tax refund scheme which could see them reclaim thousands of pounds in revenue.
Research and development (R&D) tax credits are aimed at companies investing in innovation. The Government rewards them for this through the rebate and they can then use the cash to help them sustain and grow the business.
Through the scheme, businesses can claim back up to 33 per cent of their R&D costs and experts at accountants and business advisors Whitley Stimpson stress that a wide variety of firms are eligible – not just hi-tech companies which is a misconception.
For example, an established solar panel specialist which has an annual turnover worth millions of pounds, has started work on a new piece of technology.
Whitley Stimpson has helped the business make a claim for labour, materials, and sub-contracting costs to the value of an extra £23,808 off their profits – a tax deduction of 19 per cent. The claim took less than two hours to complete.
Another claim was made for a well-established international IT business specialising in cloud-based service support. Whitley Stimpson recently submitted a claim for an additional tax relief of £71,000 representing 85 per cent of its total expenses.
A further example comes with a start-up business specialising in cloud-based payment processing systems.
Up to 80 per cent of the company’s costs qualify for R&D tax credits and it recently submitted a claim for £160,000 covering its payroll for two months.
Significantly, the firm’s claim is calculated within two weeks of Whitley Stimpson receiving the data and processed within six weeks of the firm’s year-end.
Whitley Stimpson director Jonathan Walton said: “We have worked with a vast range of businesses from a roofing and construction firm to a company which developed a face recognition mirror.
“In the case of the start-up business with no income, these tax credits have kept the company alive. It’s not about reducing profits because the firm is purely involved in R&D and all they have is expense.
“The directors can cash in the value of their R&D claim and then receive a refund back from the Government within 30 days of their corporation tax return having been submitted.”
Significantly, Whitley Stimpson works on an hourly rate for this work rather than taking a percentage of the tax saved.
Jonathan added: “The fees we charge are far less than the specialist R&D niche firms which take up to 30 per cent of the savings.
“We ensure the claim is genuine and thorough and we have never had one rejected. We do 80 per cent of the work inhouse and for more complicated claims we will bring in a technical expert.
“I would encourage anyone carrying out research and development to investigate making an R&D claim as it could make a real difference to their cashflow.”