If your company is involved in new product development then you could be entitled to claim back some of your investment. Do our simple R&D TaxEway questionnaire and find out.
SJIC has worked with R&D tax experts Peters Elworthy and Moore (PEM) to develop a simple checklist that will enable technologists to see if their work is eligible.
The most important thing is that you don’t have to be discovering DNA to qualify.
When the revenue guidelines first came out they were very difficult to follow but the rules have been substantially rewritten and the majority of the claims are now accepted. Research published by the CBI in February 2009 showed that while the majority of companies had their claims paid in full, and SMEs made the highest cost savings (of 10.5% on average), seventy percent of companies that had claimed had used the large company scheme.
To qualify a company needs to have spent over £10,000 on R&D that they can justify as overcoming a technical or scientific uncertainty, and to have an interest in the Intellectual Property. They don’t need to have paid tax and can even claim for contract work that they have done for someone else.
You don’t need a eureka experience for it to count as R&D and the good news for software companies is that you don’t need to own a patent.
Software companies are often unable to protect their work with patents, which disqualifies them from government grants and is off-putting to investors. R&D tax credits provide a means of reclaiming the entrepreneur’s investment, supporting the organic growth of these companies and reducing the barriers for entry.
With bank and VC finance hard to come by at present, taking advantage of the government’s generosity makes a lot of sense!
