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FIND R&D SAVE CLIENTS

Find R&D. Save Clients.

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Right now, the government is throwing a lot of money at business owners. Money to help them survive these incredibly difficult times. But in most cases, all this money will eventually need to be paid back. It’s hard to estimate just how long it’s going to take for businesses to get their hands on these critical funds.

But as their advisors, there are other options for you to share with your clients, and one that is massively underused by so many businesses: that’s R&D Tax Relief.

You’ve no doubt investigated this relief previously, but business activities can and do change…..a lot. R&D could be a very real lifeline for some clients right now, to get money back into their business. If you can find R&D Tax Relief for a client, you could save their business.

And, even for those clients who already claim, there are steps that could mean more funds are identified, or advanced funding brought in.

For your clients, this is far better than loans hanging over their heads. It’s just money that belongs to them anyway.

We understand that without a specialist hat on, R&D Tax Relief can be time consuming to navigate. It can also be all too easy to rule a client out. It’s not that black and white though. Businesses across any industry can absolutely be eligible to make a claim, you’ve just got to know what to look for.

So, we’ve done something to help.

To give you autonomy to identify clients who might be eligible, we’ve split the it into two steps:

STEP 1 – The Business Activities

You know your clients and their business activities, so it makes sense for you to determine what they are doing and whether they meet the foundation criteria.

View infographic: Are your clients eligible for R&D Tax Relief?


STEP 2 – Science & Technology

Then, in a 15-minute call with us & the client, we’ll determine: whether the business activities fall into science & technology (this is the bit that can be difficult to determine), what exactly qualifies and what doesn’t within the claim, and, the size of the claim.

 

To get you started, we’ve created a toolkit of resources to use with your clients to help reach out about R&D Tax Relief and determine if they are eligible.

At the moment this toolkit is reserved for Radish and Diagnostax customers but do drop us an email at marketing@radish.tax if you’re interested in downloading the toolkit.

INFOGRAPHIC_ Are your clients eligible for R&D Tax Relief

Infographic: Are your clients eligible for R&D?

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To help identify clients who might be eligible for R&D Tax Relief, we’ve created this handy infographic diagram and separated it, into two steps.

STEP 1 – The Infographic

You know your clients and their business activities, so it makes sense for you to determine what they are doing and whether they meet the foundation criteria.

STEP 2 – Science & Technology

In a 15-minute call with us & the client, we’ll determine: whether the business activities fall into science & technology (this is the bit that can be difficult to determine), what exactly qualifies and what doesn’t within the claim, and, the size of the claim.

It’s that straightforward.

Infographic - is your client eligible for R&D

We’ve also created a toolkit of resources to use with your clients to help reach out about R&D Tax Relief and determine if they are eligible.

At the moment this toolkit is reserved for Radish and Diagnostax customers only but do drop us an email at marketing@radish.tax if you’re interested in downloading the toolkit.

4 Ways R&D Could Save Your Business - no title

5 Ways R&D Could Save Your Clients Business

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5 WAYS R&D TAX RELIEF CAN GET MONEY BACK INTO YOUR BUSINESS


R&D is a massively underutilised tax relief that many businesses could be benefitting from right now. We’re talking up to 33% of the costs incurred on activities that are considered eligible and this money can be used for any purpose. Money that is needed by businesses right now.

But, not only that, there are potential options for those businesses already making claims, to identify more funds.


1. R&D Tax Relief for a business with no previous claims

An SME company that qualifies for R&D Tax Credits can receive an extra deduction of 130% of qualifying costs against their taxable profits. This is in addition to the 100% revenue deduction already given. For loss-making companies, the loss can be given up (so can’t be used in future) for an immediate tax credit equating to a maximum of 33.4% of the qualifying costs. Claims can be made up to 2 years AFTER the end of the accounting year in which you incurred the costs. This means you can claim for costs that were incurred up to 3 years ago.

Example:
A company with an April year-end incurs R&D costs of £100k per year and has been loss-making as they are currently in the development phase with their product.

They can make an immediate R&D claim for their April 2018 and April 2019 periods. They have already deducted £100k of costs from their annual revenue but can also deduct another £130k per year due to R&D tax credits (130% of £100k). In total, the £100k spent allows them to deduct £230k from revenue.

If losses are large enough, they will receive a tax credit of nearly £67k (£100k x 2 years x 230% x 14.5%). This will be received by the company as tax-free cash.


2. R&D tax relief where a business has built up losses

Some companies have made R&D claims in the last 2 years and decided to carry forward losses made into the future – as it will save them corporation tax in the future. They should consider amending their tax returns now to change the carried forward loss to a tax credit.

Example:
A company has made R&D claims for the last 2 years which has built up an “R&D loss” of £500k. Due to their projected product launch and projected profits from commercialising, they had decided to carry this forward to get future corporation tax relief of £95,000.

Instead, they can file amended tax returns and claim immediate cashflow of £72,500.

3. Maximising previously claimed R&D tax relief

It is worth reviewing all previous R&D tax relief claims to ensure the claims were maximised. If they have not been maximised, amended returns can be submitted to claim additional tax relief.

Example:
The company has not claimed for all materials, heat and light costs, smaller subcontractors, support staff e.g. HR, admin, finance.

The total of all these costs come to £15k a year.

If they resubmit the R&D claim with these costs included, it could give a further £10k tax refund immediately (£15k x 2 years x 33%)


4. Obtaining advance funding for R&D tax relief

Advance funding may also be available for a claim in the current year.

Example:
A company has been making R&D claims for the last 3 years and gets £25k a year back from HMRC.

They have a June year-end, but their accounts and tax usually take 10 months to finalise. Advance funding is available in April 2020 for the June 2020 year-end, which would otherwise only have been received in June 2020. This effectively brings the cashflow forward by 15 months, with only the financing cost to the client.


5. Shorten year-end to accelerate tax credit

For a loss-making company, shortening the year-end so that an R&D claim can be submitted sooner is worth considering.

Example:

A company with a June year-end has R&D costs of £100k and total losses of £100k up to 31 March 2020. They anticipate a much-reduced R&D spend up to June.

They decide to shorted the year-end (9 months to 31 March 2020) which allows them to submit an R&D tax credit claim of £33,350 to HMRC 3 months sooner than otherwise would have been the case.


So, we’ve created a toolkit of resources to use with your clients to help reach out about R&D Tax Relief and determine if they are eligible. At the moment this toolkit is reserved for Radish and Diagnostax customers but do drop us an email at marketing@radish.tax if you’re interested in downloading the toolkit.


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