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Understanding the importance of R&D Tax Claims and R&D Funding
Technology is evolving daily, leveraged by businesses to secure competitive advantage and well-positioned to upgrade the lives of the global family. Research and Development (R&D) is the process by which this evolution takes place, as businesses undertake activities which seek to further expand the boundaries in an attempt to create new, or improve existing, services, processes and products.
Although many companies commit significant amounts of expenditure in undertaking compliant R&D activities, many choose to focus solely upon the commercial potential of their endeavours, paying little heed to projects which ultimately fail to deliver the desired outcome, other than to consign them to ‘Room 101’.
R&D Tax Credits were introduced to the UK at the turn of the Millennium to encourage businesses to push the ‘innovation envelope’ beyond its’ current limitations. In doing so, these innovators would be entitled to enhanced corporation tax relief on the expenditure incurred across a defined range of criteria in undertaking those activities (specifically staffing, subcontracting, materials and external service providers) in the form of a refund (for tax already paid), a reduction in a future tax liability or – unique to the legislation – in a one-off cash award in exchange for taxable losses surrendered.
Where businesses seeking to engage in compliant R&D activity are not able to do so through a lack of financial resources, various R&D funding initiatives are available for use in developing new products, processes or services. These initiatives may vary widely in both value and/or eligibility and may also preclude / restrict the recipient from subsequently claiming R&D Tax credits for the work undertaken.
Nevertheless, whether you are looking to reclaim expenditure previously incurred in undertaking innovative activities, or simply looking for a means of funding similar activities in the future, it’s essential that you choose the right specialist partner to guide you through the process. Innovation Tax have a wealth of experience in helping businesses advance down either path, so why not call today to see how you can join the innovation highway……?