Rob Sowden of Bournemouth-based consultancy Business Cash Enabler reports that a financial printing business has received over £750k over the past decade via HMRC’s Research & Development tax credit scheme.
Rob Sowden, innovation tax incentives specialist reports:
“This is one of the best testimonies to the government’s reward to businesses that carry out innovation activities. The consistency of the government support via the Research & Development (R&D) tax credit scheme is really showcased with this business. The scheme was introduced in 2000/01 to reward companies for innovation, to ensure the UK remains a thriving and rewarding place for businesses to trade in. This business has received a consistent average of £75k cashback annually for a decade since 2009. This cashback is not taxed again, it is a contribution straight to the bottom line. Many businesses and their advisors often associate the R&D tax credit scheme with sectors such as manufacturing, engineering, pharmaceutical, etc, yet this business in the sector of commercial printing highlights that a business in any sector can obtain this valuable cashback, however, it does take a specialist claims provider to correctly identify the nature of qualifying activities to ensure 1) that the company obtains maximum entitlement, and 2) that it doesn’t submit a claim either directly or via an accountancy firm, that is not actually compliant with legislation. On this latter point, it is important to recognise that HMRC may make an initial award of a tax credit or cashback, but if it later discovers that this claim is not compliant, it may result in a clawback.
“A trading company that carries out any form of unique innovation may qualify for a year-on-year cashback from HMRC under this very generous scheme. A first time claimant company can claim back two accounting periods. A business does not have to be profitable to get this cashback, in fact a loss-making company can obtain an enhanced cashback, up to 33% of qualifying staff costs can be rebated. Some businesses have claimed and received small amounts, much less than they are entitled to. What catches many businesses out is that they believe this claim opportunity is an accountancy work-stream, whereas it is really about technology. The service provider that helped this business assigned a specialist IT analyst to identify all of the qualifying activities permitted within the government’s scheme rules.”
Business Cash Enabler provides a free service to businesses to check eligibility for innovation tax incentives.
www.businesscashenabler.co.uk