There’s probably no doubt that the past two decades have been an amazing time for technological development, and with the rise of Artificial Intelligence, blockchain and the continuous development of smart devices the tech industry is not slowing down, even with potential economic shocks like Brexit on the horizon. This means that there has never been a better time to claim R&D tax credits.
Technology companies are prime candidates for R&D Tax Credits due to the continual modernization of the industry. Despite this, many still either don’t claim their full eligible amount or even miss out on the credit completely due to a lack of understanding of the eligibility criteria.
With the global market becoming increasingly competitive, there’s never been a better time to deep dive into the credit to understand how it could affect your business.
Things you should know...
Research and Development tax credits are designed to encourage companies to invest their time and money in innovation. But this doesn’t mean that you need to be the next Elon Musk to be eligible for tax breaks associated with R&D credit.
Most companies that invest in developing or improving something new in the technology or science fields can apply. This means that as long as your project researches or develops a new process, product or service or even improves on an existing one, you should be looking into claiming your tax relief.
You would be surprised what type of projects are eligible for such tax relief. Have you ever heard of bee tracking? This small yet interesting project has really taken advantage of the perks that came with the R&D tax credits.
And there’s more - your project doesn’t need to be successful to claim the tax break. If your project is still ongoing or was unsuccessful, you can still claim the tax break! The idea behind the Research and Development tax credits is to drive innovation, as well as encourage and reward entrepreneurs and companies which try to contribute to the development of technology and science.
Don’t limit yourself
If you are using other ways to fund your company’s research or project that doesn’t mean that you can’t capitalise on other forms of support or tax relief. If you’re running a grant-funded project it is even more of a reason to apply for R&D tax credits.
If you have an idea for research or a project that will in any way contribute to the development or improvement of something new within the technology or science sectors, speak to a specialized R&D tax credit consultant who can advise you and answer all your questions before you start.
Other tax reliefs
As an entrepreneur or a company owner, you should always be looking for ways to save your company money in order to invest it elsewhere, develop your business and drive the economy at the same time.
Other tax reliefs you might want to check out for your technology business are Research & Development Expenditure Credit (also known as Above the Line R&D Tax Relief), Research & Development Capital Allowances, Patent Box (News - Alert) and Creative Sector Tax Reliefs.
