Page 32 - BOSS Today Issue 15

finance

MakIng

reSearch pay

Claiming tax relief on your company’s R&D is now even easier than you

think, thanks to a new scheme run by the BOSS Federation

tax deductions, where it had ✱ SME scheme benefits: if you
previously been thought that are paying corporation tax,
none existed. you will receive 225 per cent
tax relief on identified R&D
So what’s available? costs. in other words, if
There are currently two types you are spending £10,000 on
of relief: qualifying R&D costs, HMRc
✱ R&D tax credits/relief, which will enable you to write
are for revenue costs that are off £22,500 against your
expressed through the profit corporation tax bill. if you are
and loss account. loss-making, not only do you
✱ R&D capital allowances, not pay corporation tax, your
which are for capital hard work will be rewarded
s your company involved a product, process, service or expenditure that is recorded with a cash payment of
in research? You would device but in an appreciably through the balance sheet. around 25p in every £1
Iprobably instinctively say improved way. identified. conditions, of
no, but when you think about it Unfortunately most SMes who What are the benefits? course, do apply.
most companies are engaged have tried to apply for these The R&D tax credit can take ✱ Large scheme benefits:
in some form of research and tax breaks have been put off by the form of either significant if you are profit-making and
development. and most of them how challenging the process cash-back or a reduction in paying corporation tax, you
carry on without knowing that can be. fortunately the BOSS a company’s tax liability. it is will receive 130 per cent tax
by being so engaged they are federation/BPif has entered even possible to claim both an relief on qualifying R&D costs.
eligible for tax credits or tax cash into an agreement with tax R&D grant and R&D tax relief in this case, if you are
refunds from the government. consultancy Howarth Lynch that on the same expenditure. spending £10,000 on
The truth is that whether is designed to make the process There are two schemes. qualifying R&D costs, HMRc
you are involved in developing both practical and simple. One is for SMes and the will enable you to receive
environmentally friendly Howarth Lynch will assess other is for large companies. a super deduction of £13,000
solutions, formulating new whether you have an eligible Generally speaking, an SMe is against your corporation tax
products, developing software claim, can prepare the claim a company with fewer than bill. There is no equivalent
or overcoming technological on your behalf, and can set up 500 employees and an annual cash-back option under the
uncertainties, it is highly likely a system that will capture your turnover less than €100m, or large company scheme.
that you can claim money back future R&D spend. Rather than a company with total assets
from HMRc. charging you up front any fees, on the balance sheet totalling n If you thInk you May
an advance in technology they only take fees if your claim less than €86m. a large havE a Major projEct,
does not have to mean is successful. company, then, is one that a nEw InnovatIon or
something that is innovative or The financial benefits of the does not meet the definition arE dEvELopIng a nEw
groundbreaking. it could include scheme can be substantial. of an SMe. product or SErvIcE that
making something cheaper, Howarth Lynch have helped The benefits differ you bELIEvE May quaLIfy,
faster, smaller, larger or longer. it many businesses to identify according to what kind of caLL StEvE waLkEr at thE
could also include duplicating valuable R&D activities and company you are: bpIf on 01676 526050.

32 BOSS TODAY | December 2012/January 2013

Boss p32-p33.indd 2 30/11/2012 14:45