Skip navigation

Gloucestershire Business News

Have you considered R&D tax incentives for short-term cash? asks David Clift of Hazlewoods

By David Clift, Hazlewoods 

As COVID-19 continues to impact on the day-to-day operations of businesses, considering all potential sources of finance and short-term cash is key.

Cashflow management will be vital now and in the coming months in order to identify shortfalls and areas in which you can make savings.

One option to explore is Research and Development (R&D) tax credits, which are available for companies working on specific projects to develop new products or services, change processes or to do things differently.

Companies that are eligible for the tax incentives are extremely diverse and, at Hazlewoods, we consider that using the term 'R&D' for this tax support is not helpful and can often discourage some companies from looking into the opportunity.

However, those businesses that recognise that the tax support is focused at 'on the ground' activities can reap considerable benefits.

What are R&D tax credits?

The key features of R&D tax credits schemes are:

* Retrospective 'subsidy' of up to 33.3 per cent of qualifying expenditure identified i.e. the company has already incurred the costs against which the finance is available.

* Accelerated processing by HMRC; in most cases, the cash payment is received by the company in just over one month from the filing of the claim.

* Relatively straightforward paperwork; unlike grant funding, the application is 'free-form', through an amendment to the company's self-assessment tax return.

Who can claim?

All companies, large and small, can claim if they undertake qualifying work - even if they do not pay corporation tax because they are unprofitable.

Small- and medium-sized companies (mainly those with fewer than 500 staff), can generally claim a credit worth 25 per cent to 33 per cent of their eligible R&D expenditure, while for larger companies the credit is usually worth around 10 per cent of the expenditure.

For our handy rates and rules guide to all things R&D tax credits, click here.

What should I do next?

Taking a practical look at the key business issues usually offers good scope for identifying possible R&D activities as a starting point for a claim.

If you are unsure as to whether your company qualifies for R&D, or if you would like to discuss your business, please get in touch with David Clift at david.clift@hazlewoods.co.uk or 01242 680000.

If you are not ready for a conversation, please just send us an email requesting a link to our handy app, where you can enter some of your details and get an instant response as to whether or not you may be eligible.

For further information and help for you and your business during the COVID-19 pandemic, visit our dedicated webpage here.

To find out more about Hazlewoods visit www.hazlewoods.co.uk 

Related Articles

Shareholders' agreements: A necessity or a luxury? Helen Howes of Willans LLP Image

Shareholders' agreements: A necessity or a luxury? Helen Howes of Willans LLP

Whether you are a small company with two shareholders, or a larger business with multiple shareholders, it is hard to overstate the importance of having a properly drafted shareholders' agreement.

VIDEO Punchline Talks: Mark Blake, Mark Blake Hair Salons Image

VIDEO Punchline Talks: Mark Blake, Mark Blake Hair Salons

In the week many of us have rushed to the hairdressers, Mark Blake - one of the leading figures in hairdressing in Gloucestershire and beyond - is in the Punchline Talks hot seat discussing reopening, operating throughout the pandemic, post-lockdown styles and much more.

Do's and don'ts of varying employment contracts - Margaret Adewale, The HR Dept Gloucester Image

Do's and don'ts of varying employment contracts - Margaret Adewale, The HR Dept Gloucester

Almost 500 British Gas engineers have lost their jobs after refusing to sign new contracts which would have seen them work longer hours while cutting average pay - raising crucial issues about what actions an employer should take if they wish to vary a contract of employment.

VIDEO Punchline Talks: Friday Briefing, April 16 Image

VIDEO Punchline Talks: Friday Briefing, April 16

The royal funeral, the reopening of shops and a legal dispute over a caterpillar cake - there has been plenty of news stories for our Friday panel of business experts to discuss.

Copyright 2021 Moose Partnership Ltd. All rights reserved. Reproduction of any content is strictly forbidden without prior permission.