R & D Tax Credits
One area of funding which is hugely neglected in the UK business sector is the money that can be recovered through the current UK Research and Development Tax Credit Scheme.
The scheme is designed to encourage and reward innovation. It allows innovative companies to either recover Corporation Tax paid and/or receive a rebate of the NIC/PAYE generated by the business. Most first-time claimants are also able to submit a claim for the previous two completed year ends.
The average claim in the first year is £40k
Low uptake in the UK
In 2013-14, the year for which figures are currently available, over 16,000 small and medium enterprises (SMEs) claimed R&D Tax Credits. But it is estimated by HMRC that there should be 150,000 companies applying in the UK.
The reason why most companies do not apply is that they do not believe they 'do R&D'.
Many see research and development as something done by men in white coats in a laboratory rather than the development of a product.
They also often look at the scheme on the HMRC site and are intimidated by the terms used. Often their external accountants advise them not to claim.
At one time or another 80% of clients looked at this scheme and thought they did not have a claim.