An article in the Telegraph this weekend highlights the gap between the amount of tax reliefs that are available for innovation, and that which is actually claimed by companies. The article claimed that on average £150,000 is being under claimed annually by companies. This is mainly due to ignorance of the schemes or companies being badly advised on how the schemes work.
The government is very keen to encourage innovation in the UK, and there are generous tax reliefs and tax credits available on R&D and Patent Box schemes. Undoubtedly these schemes can be complicated to navigate but if you can get a good tax advisor to assist you, the reliefs be a very valuable resource when developing a product or service.
One of the main reasons for the underclaiming of these tax reliefs is that companies only think they will apply to the development of a product in an R&D laboratory (the classic men in white coats!). This is not the case and we have experience of dealing with various types of businesses that have successfully claimed the R&D tax credit and Patent Box tax relief including:
- App developers
- Bicycle manufacturers
I would recommend any company that is developing a new product or process reviews their eligibility to claim these tax reliefs as they may be pleasantly surprised!
Author: Plus Accounting
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