When people think of research and development (R&D), they often picture large corporations or specialist science, tech or pharmaceutical companies. This explains why, despite the Government’s efforts to encourage innovation in UK industry through the introduction of R&D tax credits, only one in five (19%) of businesses that can be classed as being ‘innovation active’ have ever claimed money back for their time and expense developing new products or processes.
This could be due to the complicated application process for claims, as many business owners may not understand what qualifies as R&D or how to go about making a claim.
To help companies to better understand the world of R&D tax credits, here are four things businesses could be doing to qualify for R&D tax credits.
1. Developing technically enhanced products
If your business manufactures products and you’re constantly working to improve those products through research and experimentation, this qualifies as R&D.
One surprising thing is that whether you’re successful or not in developing a new product doesn’t actually matter as, any time spent on the process still counts.
Is your business doing something similar?
2. Creating new systems or software to improve your quality of service
When businesses see a new software or manufacturing development that would improve their product or service, it’s common to look at ways of integrating that technical advancement into what they do, to improve service quality. The good news is that if you’re doing that you could qualify for R&D tax credits.
How are you bringing technical innovations into your business’ systems and processes?
3. Modifying existing systems to improve efficiency, capacity or performance
Almost every business, no matter which industry or market it operates in, will want to improve efficiency, capacity and performance.
Looking at ways to improve this won’t only increase output, sales and the profit of the business, it will also qualify the organisation for R&D tax credits.
What innovations are occurring in your business to improve the efficiency and performance of your staff or products?
4. Developing bespoke solutions for particular problems
Every client is different and there won’t be many businesses that haven’t been presented with a unique problem by a particular client.
Primarily, the work that goes in to developing solutions for a particular problem is to meet your client’s needs. However, it also makes you eligible for R&D tax credits.
What bespoke client solutions is your business working on that could qualify for R&D tax credits?
Do you believe you have a suitable R&D claim?
To find out if you’re eligible for a claim, get in touch with the EFM team. Email or call 01582 516300 to set up your free one hour consultation.