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Company Making a Loss? Think R&D Tax Credits

Posted on November 26, 2020

Funding Innovation

The British Government has recognised for a long time that the innovativeness of companies is key to economic success. This is why it has opted to reward innovative projects for over a decade. Some experimental work means that many SMEs result in being unprofitable for a period of time. But with R&D Tax Credits, this is not a problem.

Launching the R&D Tax Credit scheme has enabled many businesses to benefit from government support for many of their science and technology projects. Now Thousands of companies have taken advantage of the scheme across a broad range of industries. For companies running at a loss, such a cash boost can prove vital to funding further R&D work.

The Myth of “Only Profitable Companies can Claim R&D Tax Credits”

Unfortunately, we hear this way too much and it’s simply not true. Many claimants of R&D Tax Credits are indeed making a profit though the scheme is also available to those who are not. As long as the project has tried to make advancements in that sector then you may be able to offset losses made against R&D expenditure.

What are R&D Tax Credits?

R&D tax credits are a government incentive designed to drive forward innovation across multiple industries. This is an opportunity for you to reduce your corporation tax bill or receive a refund from HMRC based upon the working hours your business dedicates to R&D.

Under the scheme, SME’s can claim back up to 33% of the costs associated with R&D. That’s 33p back for every £1 spent on qualifying R&D activities. To find out how much you could be refunded, check out our handy online calculator.

Can Your Business Make an R&D Tax Credit Claim?

Any company of any size can apply for R&D Tax Credits. Some businesses will apply having created a brand new product, process or service. Others may have instead upgraded an existing one. This could be because a food or beverage business trying out a new variety of flavours. the opportunities are endless.

The scope of eligibility is huge, HMRC does enforce some very strict criteria relating to the claims process. The main aspect here is that the R&D project didn’t just produce commercial benefits it also needs to have benefitted the wider industry as a whole.

We can’t stress enough how stringent HMRC’s criteria is and how getting your claim right the first time is indispensable. before you even think about making a claim, it’s therefore strongly advised you speak to an R&D Tax Credit specialist like ourselves, Green Jellyfish. We will be able to determine your eligibility and your chances of success, before optimising your claim for the maximum value.

Best of all, companies who invest in Research & Development are eligible for tax relief.

We don’t want you to miss out on this tax relief, so we urge you to check your eligibility today (it takes just a few minutes). If you’re eligible, great! If not, then at least you have the peace of mind of knowing that you explored the possibility. https://www.greenjellyfish.co.uk/contact/ 

Find out how much you could claim by using our handy R&D Calculator!