Back in the day, if we needed change for a pint of milk, the first place we’d look was down the back of the sofa. You could normally come up trumps with a handful of coins (once you’d dusted the crumbs off). Even better was finding a forgotten fiver in the pocket of an old jacket. It felt like a real win.
Of course, your business finances don’t work on that level… do they?
We talk to a lot of businesses every day and there’s nothing we like more than finding a way to release cash that the customer already has within their business. Sometimes this cash means that a business can get away with borrowing less to fund an important purchase, sometimes it means they can make payroll. You might think that getting to this money means the accounting equivalent of going through all the old jackets – and sometimes, yes, you do need to do this – but there are a couple of places we look first of all because a) a lot of businesses don’t know about them and b) there is one place that we have found gives us a lot of financial bang for our investigative buck.
OK, let’s not keep the mystery going any longer: when a business needs cash, we always check whether a business is claiming R&D tax credits.
What are R&D tax credits?
R&D tax credits are a financial incentive offered by the government to encourage businesses to invest in research and development (R&D) activities. These credits reduce a company’s corporation tax bill, essentially giving them back a portion of the money they spend on qualified R&D projects.
Why don’t businesses use them?
Either businesses don’t know about them, they don’t know what they are worth or they don’t realise that they are carrying out R&D. As the criteria for what counts as R&D have widened and the rules recently changed, you may find that something you’ve always been doing has suddenly become eligible.
What activities qualify?
R&D projects must relate to science or technology, however HMRC’s definition is broad and includes investment into IT systems, data, cloud computing, mathematics and more. The range of businesses carrying out qualifying activity is ever expanding.
How much are they worth?
The exact value of R&D tax credits depends on several factors, including whether your business is running at a profit or loss, how you blend employees and contractors in R&D activities and other R&D costs. The numbers can get tricky, so we built a calculator to make working it all out easier. Click here to find out how much you could claim: [CALCULATOR LINK]
When cash is tight, the last thing you want to do is leave money on the table. R&D tax credits have played a big part in Swoop’s own journey, giving us a boost where we needed it and allowing us to grow faster than would have otherwise been possible. Look around and ask yourself whether your activities count as R&D (you might be surprised by what qualifies), do the sums and claim what’s yours.
