Is your business looking for cash hidden under the sofa? Research and Development tax credits could provide the answer.

CORONAVIRUS FUTURE FUND

This scheme will issue convertible loans between £125,000 and £5m to innovative companies which are facing financial difficulties due to the coronavirus outbreak. The scheme will launch in May 2020.

Eligibility:

  • UK business
  • Can attract the equivalent match funding from third-party private investors and institutions.
  • Has previously raised at least £250k in equity investment from third party investors in the last 5 years.

Further details : https://www.gov.uk/guidance/future-fund

R &D support

UK businesses driving innovation and development may be eligible for support via Innovate UK. £200m of grant and loan payments for 2,500 existing Innovate UK customers will be made available as well as £175,000 support for up to 1,200 firms not currently in receipt of Innovate UK funding. This scheme will be available in May 2020. Further details :  https://www.gov.uk/government/organisations/innovate-uk

CAPITAL ALLOWANCE AND RESEARCH AND DEVELOPMENT TAX CREDITS – CURRENT SCHEME PRE COVID-19

Capital allowance and Research and Development tax credits are a government incentive designed to reward UK companies for investing in innovation.  They can be a valuable source of cash or a credit against Corporation tax for businesses and in these uncertain times it may be worth exploring whether your business would qualify.

Who would qualify?

UK Limited Companies spending money developing new products, processes or services, or even enhancing existing ones may be eligible for R&D tax credit relief.

If your business is attempting to resolve scientific or technological uncertainties by taking some degree of risk, it may well be carrying out qualifying R&D activity. Even if your project is unsuccessful, it may still qualify for R&D tax credits.

When can I claim?

Claims can go back for two qualifying years so if your year end is 31st March 2020 you can go back to 31st March 2018.

Which costs would qualify?

Staff costs, including salaries, employer NI, pensions and reimbursed expenses

Sub-contractors and freelancers

Materials and consumables including heat, light and power

Some types of software

How much could I claim?

This depends on the size of the business. A SME with fewer than 500 staff less than €100m turnover or €86m gross assets could claim up to 33 pence for every £1 spent on qualifying R&D activity.

For many businesses this tax relief can be paid in CASH if you are loss making.

Will Coronavirus affect my claim?

HMRC have so far stuck to their target of processing 95% of applications within 28 days.  This means that qualifying companies could have access to valuable cash in good time to help businesses survive this crisis.

What do I do now?

If you think you may be eligible speak to your accountant or get in touch.

 

 

 

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