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Here are 7 tips on how you can ensure that you make the most of your claim for R&D tax credits.
- Don’t assume your company doesn’t qualify for R&D tax credits – even if your accountant has discounted it or perhaps not even mentioned it (in fact that might be all the more reason to check it out!)
- It doesn’t matter whether your company is profitable / tax paying or loss-making – R&D tax credits relief can benefit you and release cash into your business in either case
- Think about R&D tax credits relief and how it might apply to your company as early as possible – This way you can ensure that you are capturing relevant supporting information, documents and costs as you go – rather than trying to cast your mind back and rebuild retrospectively which might lead to sub-optimal claims
- Don’t discount R&D tax credits claims if you carried out eligible activities a couple of years back (thinking you’ve missed out) – you can make retrospective claims for accounting periods ended in the past two years. So at the time of writing this post (20 June 2016), say you have a 30 September financial year end, then the periods ended 30 September 2014 and 30 September 2015 are still open and eligible for R&D tax credit claims.
- Don’t wrestle with the definition of what activities qualify for R&D tax credit relief on your own – many companies wrongly count themselves out when a quick chat with a R&D tax specialist might have helped them understand how they do qualify. Many company owners are stunned at the breadth of the R&D tax relief.
- Don’t think you have to leave your current accountant to access specialist R&D tax advice – most R&D specialists (like us :))will supplement the good work your accountant is already doing for you with their specialist R&D tax services so this needn’t upset your ongoing accountancy support relationship.
- Think about how the UK R&D tax incentive can fit into your overall funding profile – tax advantaged funding such as SEIS / EIS can typically be used in harmony with the R&D tax incentive. Watch out for grants as these can impact adversely on the levels of tax relief available under the R&D tax incentive. Cash tax breaks such as the Patent Box can be used alongside the R&D tax relief. As you can see, thinking about how this can all fit together sooner rather than later will help optimise available funding.