There are 2 business tax questions that clients ask me about all the time: R&D tax credits and changes to IR35. In this post, I'm going to summarise the tax changes and huge opportunities around R&D. I'll take a look at IR35 soon.
Summary
If you do R&D in your business, you could benefit from some significant tax breaks.
For example, did you know that HMRC provide qualifying clients up to 33p for every £1 spent on R&D?
You may also be interested to know that our record R&D claim for a year to date is a £454k cash injection from HMRC. Imagine that happening in your business!
So, if you are not claiming, you may be missing out.
R&D: Did you know?
Here are a couple of points about R&D tax credits which you should know:
1. HMRC are putting a cap on R&D claims.
The R&D cap will be up to 3 times PAYE & NIC liability. This could have a big impact on the amount a business can claim which would impact cash flow.
If you weren't aware of this, it would be wise to review of your R&D position with your tax advisor soon, so a plan can be put in place. The cap comes into play into April 2020.
2. R&D grants are also available.
If your business does R&D, did you also know that there are grants available from places like Innovate UK and Horizon 2020? Grant funding between £25k and £10m is available.
Find out more via this Government site: https://www.gov.uk/guidance/innovation-apply-for-a-funding-award
If you have never considered this before and would like help with your grant application, do let me know.
Next steps
* READ: Here is a helpful short guide from HMRC that explains more about R&D tax credits
* REVIEW: The R&D rules are changing in April 2020, so now is a good time to review your R&D tax situation
* ASK ME A QUESTION: If you would like to discuss any aspect of your R&D tax situation, I'm here to help. You will be surprised what can qualify for R&D - I have successfully made claims in all kinds of sectors you would not normally associate with R&D such as HR companies, recruitment firms and furniture shops, to name a few.
You can email me on itimms@critchleys.co.uk or call me on (01865) 261100
Find out more about Ian Timms