R&D Tax Relief For The Technology Sector
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Technology, R&D Tax Credit
In recent times, the growth seen in the world of technology is explosive. Every aspect of our day to day lives involves the use of technology. From health to transport, energy, down to the tools and devices we use, the list of technological aspects is endless.
The rapid growth witnessed in technology is not by accident but as a result of numerous and extensive research and development projects.
Reports indicate that tech companies are registering a growth of up to 28% in a period of five years with digital companies growing twice as fast as non-digital companies. The move by the government to provide funds aimed at motivating research and development projects couldn’t have come at a better time.
So what does Technology R&D tax credit entail and how do you know whether or not you qualify to benefit? Read on to find out;
What is Technology R&D tax credit?
Technology R&D tax credit is money set aside to assist both small and established tech companies to conduct research and development projects.
With up to £2 billion going back to companies in paid claims, it is not clear why for many technology companies the R&D tax credit is still a foreign subject. You’ll be delighted to know that a lot of companies actually qualify and stand a good chance of benefiting from this scheme.
Some of the activities that can be included in a technology R&D tax credit claim include;
- Feasibility studies
- Developing, analysing and designing the technology product or service
- Defining technical objectives
- Reviewing competing and new technology
- Testing of a product or software
- Realising uncertainties
- Managing and planning projects
- Proof in form of documents or other means to support your research and development project
If a small company or an SME made profits in a given year, they are bound to pay less corporation tax for the same period. Small companies can get up to 26% of all the money they spent on R&D projects.
Companies that end up making losses as a result of research and development activities can rest easy. In certain instances, these loss making companies have the option of forwarding their losses partially or in full in exchange for a research and development tax credit payout.
Do you qualify for a technology R&D tax claim under the SME or large company scheme?
Provided that your tech company is actively involved in research aimed at improving, processing, developing, innovating or servicing a product, then you should qualify.
For a company to qualify under the SME must have a staff count of below 500, a financial yield of €100 million or gross assets that are below €86 million. Alternatively, a large company that exceeds the aforementioned limits can make a claim.
In Europe, London ranks top among the cities that are keen on supporting start-up companies or SMEs. This serves as wake up call for such small companies to come out and seize this moment if at all they wish to expand within the technology sector.
What with positive indicators that show immense growth in sectors such as information technology, artificial intelligence, communication and information technology, engineering, among many others. Statistics show that over 22,500 claims were made in 2015.
However little over 5000 claims made can be linked to technology or in particular, the information and communication sector. It is clear that of all sectors, it is the technology sector where research and development projects take place the most.
Tech companies, big or small may feel uncertain and overwhelmed in assessing how to make their technology R&D claim. For smaller companies, spending wisely is key. With limited resources, it is no wonder that making R&D credit claims remains less of a priority.
We understand that this might be a tiresome process that you more often than not, do not want to get yourself involved in. We don’t want you to get left behind, so take a chance and contact us by filling in the enquiry form via the link below and we promise you won’t regret it.
Our panel have all the resources needed to successfully forward your claim. They will dedicate time and expertise to you in determining what rewards you are entitled to.
Click on the link below to begin your claim now.
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