Research and Development Tax Savings

As a business owner, you want to increase the amount of money coming in to your company and minimise the amount going out, particularly where tax is concerned.

One way to reduce your tax bill is to claim Research and Development (R&D) tax credits, which increase tax relief against taxable profits. These can be used by both small and medium-sized enterprises (SMEs) and large companies.

As one of the top four tax practices in a regional firm in the UK (Taxation Awards 2013), Lamont Pridmore is well placed to help your business take full advantage of the R&D benefits it is entitled to.

Who can claim?

Generally speaking, a project must seek to achieve an advance in overall knowledge or capability in a field of science or technology in order to qualify for R&D tax relief.

Claims can be made by businesses run through limited companies across a wide range of sectors, including technology, software, manufacturing, engineering, construction, automotive, pharmaceutical, food and drink, design and printing.

What benefits are available?

For SMEs, the rate of relief which can be claimed is 225% of qualifying R&D costs incurred on or after 1 April 2012 (200%for expenditure incurred between 1 April 2011 and 31 March 2012). An SME is a company with fewer than 250 employees and either an annual turnover below 40 million euros or a balance sheet below 27 million Euro.

For larger companies, the rate is set at 130%. However, as of 1 April 2013, large companies – and certain SMEs which are restricted to making claims under the large company scheme – can take advantage of a 10% ‘above the line’ R&D tax credit, which unlike the SME scheme, can be claimed regardless of whether or not the company has made a profit for the year in question.

There is a time limit of two years from the end of a company’s accounting period to make the claim.

How could claiming R&D tax credits benefit my business?

In these challenging economic times where every penny counts, it is more important than ever to ensure that you are taking full advantage of the tax-saving opportunities available to you. Many businesses are still paying too much tax, either because they are not aware they are doing so or because they do not know where to turn for help.

Reducing your tax bill means more money is retained within your business, resulting in improved cash flow.

How can I claim?

Claiming this tax relief can be a complex process, especially when you are trying to focus on running your business. At Lamont Pridmore, we can establish whether or not your business is eligible for R&D tax credits and, if so, help you put together a strong claim.

Only certain items of expenditure qualify for R&D tax relief and these may include:-

  • Costs relating to independent research
  • Staff costs
  • Sub-contractors (65% of costs)
  • Agency workers
  • Materials
  • Consumables, including water, fuel and power of any kind
  • Software
  • Equipment

We have a proven track record of helping businesses of all sizes, across a wide range of sectors, make significant tax savings by taking advantage of the reliefs they are entitled to.

Even if you are not sure whether you qualify, it is always worth seeking advice to ensure you are not missing out on what is rightfully yours.

For R&D tax credit claims we can work on a ‘no win no fee’ basis which guarantees that your business will always benefit from the services we provide.

To find out how Lamont Pridmore can help you, please contact us.