Cottons London secure £250,000 tax credit using R&D Scheme
We are delighted to announce that we have helped one of our clients secure a £250,000 tax refund using the Research and Development(R&D) Tax Relief scheme.
Probably Should, Probably Haven’t
It’s come to our attention that the majority of businesses who could claim one of the most lucrative tax reliefs currently available, simply aren’t. With that in mind, we’ll say now you probably should check this out because the chances are you probably haven’t.
R&D Tax Relief can be claimed by any limited company working within the field of science and technology on projects that are game-changing. That could mean developing software or hardware but, it could also mean working on a new service that could influence the behaviour of an industry; innovation comes in many forms.
If you aren’t sure if this applies to you then just ask, you have nothing to lose and a lot to gain if the answer is, ‘yes you are eligible’.
The Case of the AI Developer
In this case, our accountants in London identified that our client was undertaking qualifying research and development projects which entailed the developing of artificial intelligence systems designed to make algorithms which in turn lead to an increase in the effectiveness of apps we use.
Once established that our client was eligible, our own in-house experts reviewed the information already provided to HMRC by the client and further assisted them to establish how much tax relief they were entitled to. This entailed identifying the relevant projects and so computing the amount spent on salaries, consultants and other direct costs in developing the system throughout the year.
Subsequently, the claim was made on the 11th June and the client received their credit just over a month later on the 16th July, after HMRC had completed their checks.
R & D and You
The scheme has been developed to encourage innovation in Britain, ensuring those spending their own funds on the innovation are encouraged to do so with little tax burden.
The tax credit works out at roughly 33% for loss-making businesses and while you might not want to be a loss-making business, the theory is that you should be making this claim as you go in order to assist with ongoing costs. Although historic claims can be made there is a two-year window from the end of the accounting period the work is carried out in.
Ollie Warne, Associate Partner at our London branch, and who was instrumental in their monumental credit success, says, “It costs nothing to check with, so ask! It seems so many businesses are meeting R&D requirements but not even realising it or too worried to claim or ask, thinking it may be very time-consuming.
So what are you waiting for, make contact with your normal Cottons contact and check if you’re eligible.