Grants & Incentives
July 10, 2023
2 Minutes

Unlock the Value of R&D Tax Relief for Your Business

Jonathan Carr
Client FD

Are you a small or medium-sized business looking for ways to increase your potential funding? Have you heard of R&D tax relief but are not sure how it works?

What is R&D Tax Relief?

R&D tax relief is an important incentive that helps businesses grow, innovate and develop new products and services. It is designed to provide financial support for businesses undertaking research and development (R&D) activities. The aim of R&D tax relief is to encourage investment in innovation by providing a reduction in Corporation Tax for companies that qualify.

Eligibility Requirements for Claiming R&D Tax Relief

In order to be eligible for R&D tax relief, a company must have undertaken activities that can be classified as “research and development” under HMRC guidelines. This includes any activities that involve the resolution of scientific or technological uncertainties with either existing products, processes or services or developing new ones. Companies must also have spent money on certain costs associated with these activities in order to qualify. These costs include staff wages, subcontractors and consumable items used during the research process such as materials, fuel and software expenses.

How Can SMEs Benefit from R & D Tax Relief?

SMEs can benefit from claiming R & D tax relief by receiving a cash infusion into their business which can help fund further research projects or pay off debts incurred while doing research. Furthermore, claiming this type of tax relief may also enable SMEs to secure larger loans from investors due to the increased financial security provided by an injection of funds from HMRC via R & D tax credits.            

R&D Tax Relief provides small and medium-sized businesses with an invaluable source of funding which can help them unlock the value hidden within their own business model. Not only does it provide a direct cash injection into the business but it also increases its attractiveness as a partner or investment opportunity for larger organisations who are looking to invest in innovative solutions which they may not have access too themselves due to limited resources or expertise.

How can Gravitate Accounting help?

As a business we have advised many clients on the benefits of R&D tax credits, we liaise with the tax consultants and ensure as a business you benefit.

Jonathan Carr

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