The Chancellor will give his first full Budget on 16 March 2016. March also marks one of the most popular months for companies to set their financial year end, so tax is often very much on the agenda at this time of year.
The UK has some of the most generous R&D tax incentives in the world and UK businesses are starting to notice. After years of steady growth in claim numbers, the latest statistics, released last September, showed a consistent jump in those claiming, which is great news, but there is more to be done. We believe that hundreds of thousands of businesses who should be claiming do not yet do so.
And if you are one of those companies who have an inkling you might be doing something eligible, act now. There is nothing more frustrating for us than when we meet a company just after their financial year end. Limited companies have 2 years from the end of their accounting period to submit an R&D claim for expenditure incurred in that period, so a retrospective claim is possible, but there are very few legitimate excuses that HMRC might accept to extend that deadline.
Over 660,000 UK companies have a 31 March accounting period, making the period between now and the 31 March one of our busiest during the year. As the clock strikes midnight on 31 March 2016, companies that have yet to submit an R&D claim for their accounting period ended 31 March 2014 will lose the opportunity to claim for those costs. With the average SME receiving over £50,000 annually under HMRC’s scheme, it’s mindboggling to think how much is being lost by those companies who are investing in innovation, but have for whatever reason never got around to thinking about submitting a claim for R&D tax relief.
The good news is that you are reading this article and there is still time to act; you might be surprised how quickly we can turn around a successful R&D claim for you so that an opportunity is not missed. We would always much rather have 6 weeks than 6 hours to help, but if you find yourself in such a predicament then speak with a specialist urgently as it may still be possible to do something, even at the eleventh hour. A good R&D specialist will always bend over backwards to ensure you don’t miss the submission deadline, and inevitably some of our team will still likely be sat at their desks as we approach midnight on 31st March working on a submission for a company that’s got in touch at the very last moment possible.
And just in case you have written off your chances because you don’t think you are doing R&D, we work with retailers, manufacturers, mobile app developers, packaging designers, SEO companies and digital agencies who have all successfully claimed R&D tax credits. You can watch some R&D case studies here. The number of companies that have been previously advised that they would not qualify for R&D tax credits based on little knowledge is in fact quite scary.
If your company is taking a risk by innovating, appreciably improving or developing a new process, product or service then you may qualify for relief. Profitable as well as loss-making businesses are able to claim under the scheme. Client funded R&D projects as well as projects undertaken internally can usually be included, and whilst grant income can limit the amount of R&D relief available, grant funded expenditure can still be included within a claim, albeit often at a lower rate.