Here is a quick recap to set the scene in case this is new to you or you need to get your facts straight.
The UK Government’s Research and Development (R&D) cashback schemes apply to UK registered limited companies. Claims are made as part of your annual corporation tax returns and that’s the beauty of it, because that makes for a very streamlined claims process. You can claim year on year for every year where you are undertaking qualifying developments.
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But be warned - you only have two years from the end of each accounting year to claim your cashback. So if you didn’t do it as part of your annual corporation tax return, you can ask your accountant to amend your tax return to include a R&D claim so long as you are still within the two year window. This is a rigid deadline so don’t miss it if you don’t want to lose out.
The average benefit is around £65,000 for Small and Medium Enterprises (SMEs). SMEs are defined as companies with zero to 499 employees (i.e. under 500 employees) plus you need to meet at least one of the following: under 100 Million Euros turnover or under 86 Million euros on your balance sheet, in the relevant accounting year.
The first step is to identify your qualifying activities (read more here on what counts as qualifying activities) and then cost them to work out Your Costs for the accounting year.
The main costs you can count to work out Your Costs are:
What you can get as cashback (in the form of extra tax relief or a tax credit cash payment) depends on two factors:
Because the value of the cashback you can get partly depends on your Taxable Profit or Loss, our chart shows you the range from the Minimum to the Maximum Cashback Values you can expect based on Your Costs.
So sharpen your pencil and get out your calculator to work out Your Costs and then read off the value of cashback that you could get.
Of course this is just an estimation process, you should consult a specialist before making an R&D claim.
Hi, I'm an R&D tax credit claims specialist, helping companies save thousands of pounds by reducing their corporation tax payments, or if they are loss making helping them get tax credit cash payments.
I'm proud to have:
Find me at: http://www.cobizfunding.co.uk