BOOST SPOTLIGHT | Boost your business Jon Connor, R&D Tax Credits Manager at PM + M, a Boost & Co member, discusses how Research and Development (R&D) benefits could give your business a competitive edge.
Research and Development (R&D) tax incentives have been around now for quite some time, but are you making the most of them? Uncovering innovation from within a business can often be complex. It may be buried within different areas of your organisation or even outsourced.
Whether you’re a recruitment agency designing a new app or a manufacturer developing new production techniques, innovation can come in all shapes and sizes, and is very rarely bound by industry. However, around nine out of ten eligible SMEs fail to claim for R&D tax relief, indicating that the hidden value of innovation is not known. Companies are missing out on valuable R&D tax credits to the tune of many thousands of pounds.
Generally speaking, I find it’s the businesses you typically wouldn’t associate with R&D that are overlooking relief. The very term “R&D” often deters many firms from applying. Innovation doesn’t always take place in laboratories with scientists in white coats.
On numerous occasions I’ve had business owners tell me “we don’t really do R&D”, often perceiving the scope of qualifying activities to be much narrower. If you are developing new products, processes or services there is a strong chance that you are eligible for R&D tax relief.
The relief allows a company to deduct an extra 130% of qualifying costs from its yearly profit (as well as the normal 100% deduction) to create a total 230% deduction. Qualifying expenditure can include costs spent on employees, software, transformed / consumed materials and subcontractors.
As a business, PM+M has helped clients all over the UK recoup over £3m in R&D tax credits in total. In turn, this has enabled business-owners to reinvest in innovation, future-proof their companies and, most importantly, invest in growth initiatives.
If you’re unsure if you qualify for R&D tax relief, it is absolutely worth speaking to an expert. The potential outcomes of making a claim could revolutionise your business and help you achieve your financial goals.