33% Moneyback on development with R&D Tax Credits
R&D Tax Credits have been claimed by over 42,000 SMEs in the UK since it was first launched in 2013 with an average value of around £49,000. This is less than one per cent of the 5.9 million SMEs that account for 99% of all businesses formed in the UK, which means owners and managers are missing out on a huge opportunity to receive a rebate on their eligible innovation projects.
What are R&D tax credits?
Research and development (R&D) tax credits are a government aimed at rewarding UK companies for investing in innovative new products, processes or services. Companies can also benefit from changing or modifying existing ones. If you are spending time and money on developments, then you may be able to claim cashback and/or a Corporation Tax reduction.
Is your business eligible for research and development ( R&D ) tax credits?
Most companies in the UK are eligible for R&D tax incentives you need to:
- Be a limited company in the UK liable to pay Corporation Tax
- Have carried qualifying R&D activities
- Have spent money on R&D activities
Don’t think that you are not eligible for the R&D tax incentive because; “We are too small” or “Our project wasn’t successful”, you may well be able to claim for 33p in every £1 spent still.
Whatever your size or sector, if you are taking a risk in attempting to “resolve scientific or technological uncertainties”, then you could qualify.
If you are claiming R&D tax credits for the first time, you can also expand the claim to qualifying activities for the previous two tax years.
How much is R&D tax credit worth?
R&D tax credits can range in value, but for most SMEs (companies with 500 staff or under, turnover sub €100m or €87m gross assets) you can claim 33p in £1. You can either request your claim is deducted from taxable profits, as a cash credit or a combination of the two.
What costs qualify for R&D tax credits?
There are a range of costs that you can claim back as part of your qualifying activities including;
- Subcontractors and agencies
What kind of projects could my business claim R&D tax credits for?
There is huge scope for R&D in any business. Many companies will pick an off-the-shelf CMS software, like our Magento 2 package, or WordPress for a B2B lead generating website that will suit most its needs, but they will often require integrations with the other key back-office systems like ERPs, accounting software, stock control, fulfilment, CRM and marketing automation suites. Work on these areas could include R&D qualifying activities, especially when being built from scratch.
You may also be developing technologies that could be resold to other companies or the CMS platform itself.
Other types of innovation projects
Tailoring experiences for users on an individual basis through a bespoke solution or integrations of SaaS products (as long as they are modified beyond its existing functionality)
Artificial intelligence (AI)
Using AI within your business in an innovative way just like we did here with inventor Joy Mangano
Making bespoke systems to utilise big data in your business, keep it secure or for privacy reasons ie GDPR
VR & AR
Both forms of technology are becoming widely used to improve the online shopping experience for customers. This could include previewing purchases in an interactive way or seeing personalised products come to life.
Developing or modifying payment gateways to provide a seamless checkout process for customers.
Using innovative technology such as biometrics or geolocation within your security measures
Integrations & Automations
Making significant modifications to allow 3rd party software(s) to work together to automate business processes
Here are a number of different developments that could be eligible including;
- Voice search
- Complex and bespoke websites and eCommerce stores with multiple third-party integrations
- Advanced functionalities using complex algorithms ie search and pricing
- Inventory management and systems
- Customisable products and builders
- Progressive Web Apps (PWAs)
- Site speed and security
I have an eCommerce business, how can research and development ( R&D ) tax credits help me?
Amazon spent over the $17bn in 2017 on R&D. Although we can only wish to spend this much, it highlights how eCommerce businesses need to be innovating to compete with large players becoming ever more dominant in the multi-trillion-dollar online marketplace.
It’s important to make sure your eCommerce store and the suite of software that is behind it works well, securely and is efficient. Developing your own technologies that can improve your business with the help of R&D tax credits can allow you to compete, improve operational performance, marketing results and overall customer experience.
There is huge scope for research and testing to improve your website and internal processes. eCommerce projects often qualify for R&D tax credits, so if you are planning new projects or have finished a project within the last 2 tax years then contact us to discuss. The credit could give your business a huge cash boost that will help drive your eCommerce business forward.
How we can help with our R&D tax credit claim
We work alongside several businesses on successful ongoing R&D eligible projects. A successful claim needs a detailed narrative, explanations of the work and accurate logs of time and expenses.
- Get in touch with us, tell us the brief for your project or idea you have.
- If you choose to use Rixxo as your development partner we’ll make sure the planning phase includes getting everything ready to submit for an R&D claim.
- As part of your project, our engineers will provide you with a detailed narrative covering the key elements of an R&D tax claim. This included an accurate time report by team member and a list of any expenses incurred. They are experienced in providing this information at the level of detail required
- We can optionally introduce you to our R&D provider who has managed our claims successfully for 5 years.
*Nothing on this site constitutes legal or financial advice. Specialist legal or financial advice should be taken in relation to your specific circumstances. For more see our Terms and Conditions