Turn your business deficit into financial growth with R&D tax credits

R&D-Tax-CreditsThe thought of having to register a business loss, especially when you need to consider how to finance your company, can be daunting to say the least. Many business owners worry about how that loss will affect their credit rating and ability to secure finance in the future, however not all losses are bad.

Here’s how many companies have improved their eligibility for finance with R&D tax credits.

In today’s ever-changing finance market, when a company seeks to borrow funds and explore wider finance options, many aspects of a company’s financial profile can come under scrutiny, such as loan amount vs. turnover, liquidity, overall payment history, and taxable profit / loss at the bottom line.

A successful R&D Tax Credits claim provides a valuable cash injection which can be used as a down payment on a significant asset purchase, or to settle day to day liabilities, which would otherwise affect the company’s financial profile.

The cash boost of an R&D credit will strengthen the overall cash flow position and associated statements. In cases where an R&D claim solely reduces taxable profit, the profit shall remain the same, but the tax credit reduces the tax payable, providing some valuable breathing space by avoiding the need for a large one-off payment to be made to HMRC.

Payable tax credits such as R&D form part of a company’s income, which is non-taxable unless they’re large scheme RDEC payments, and where R&D projects are continuing over a number of years, some financial institutions may take any future payable cash tax credits into account in support of an application.

With such benefits its surprising that more companies aren’t taking advantage of R&D tax credits to strengthen their position, should borrowing be required in the future.

Find out if you have an eligible claim

You may well have questions around R&D Tax Credits.  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.