More businesses could develop with research tax relief
Businesses could be missing out on thousands of pounds by failing to claim tax relief for research and development projects.“While few businesses expect many favours from HMRC,” explains Mike Snape from Enterprise Europe Network North West (EENW) “North West companies with research and development projects could quickly see the tax man as their new best friend if they take advice on how to claim tax back on their R&D projects.
“Companies can claim back 65 pence in every pound spent on R&D, either through corporation tax or through tax credits, effectively cutting the investment needed to get a project or product off the ground by more than half.”Only 11,000 companies claimed tax relief for R&D projects last year across the whole of the UK. Indeed, the level of claimants is so low that HMRC only has two R&D tax inspectors covering the whole country.
One company that has benefitted from pursuing a claim for an R&D tax rebate is Landmark Environmental Ltd, an environmental management solutions provider based in Preston. The company specialises in helping businesses manage their water resource and heavily invests into research and development for the benefit of their growing business and client needs.The company signed up for EENW email alerts and was contacted by EENW to discuss general business advice. Mike alerted the company to the possibility of claiming an R&D tax rebate and, after working with its financial advisors, the company reclaimed £11,000 in corporation tax payments, which it was then able to re-invest in the business.
Steven Miles from Landmark Environmental said: “We simply didn’t know about the possibility of tax relief on our investment in R&D until EENW raised it and, even though the research project was never completed due to lack of funding from the client, we were still able to make a successful claim. “It’s really important to maximise any sources of tax relief, particularly as we come out of recession and by working with EENW, we were able to identify a new way of claiming a rebate and inject some cash back into our business.”