Its tax tips time again, and this time we’re talking Research and Development (R&D).
Full disclosure up front on this one – its something we want to make sure all our clients are aware of, but it’s not something we can help with.
R&D is an area that can save you a whole bunch of cash if its applicable, but because its quite a niche area of tax we’re saying “Hey this exists” but will have to send you off to speak to someone else if you need more information.
What are R&D tax credits?
Research and development (R&D) tax credits are a government incentive designed to reward businesses for investing in innovation. Companies that spend money developing new products or services, or enhancing existing ones are eligible for R&D tax credits.
What do I get?
There are different schemes and options available depending on what you’re doing. You can receive a cash payment or a corporation tax reduction usually.
What counts as research and development?
The government keeps the definition pretty broad, of course. If you are taking a risk by attempting to “resolve scientific or technological uncertainties” then you may be carrying out activities that are covered.
Your business does not need to be in the science or technology field, just the R&D itself needs to be scientific or technological in nature, but businesses in any industry can make a claim.
Get a grip Beth – I don’t own a lab coat
Glorious news, you don’t need to, unless you’re into that kind of thing. If you’re creating new prototypes for enviro friendly packaging, that could count. Maybe creating a new software or app, creating new food product or changing how a beer is brewed. Even creating a new piece of exercise equipment could count.
The bottom line is if you are creating, developing or improving something, have a think if R&D is applicable, and if it is don’t miss out claiming!