By Mike Lloyd, managing partner, Haines Watts Swindon.
Are you and your business involved in research and development (R&D)? Are you absolutely sure?
Many business leaders are unaware there are potentially significant tax savings available if R&D expenditure is identified and appropriate claims made to HM Revenue & Customs. 
In my experience, businesses are often surprised to find out they are even eligible to make a claim.
Their management teams assume R&D means people in white coats working in a lab. While businesses involved in the stereotypical image of R&D do qualify – so do many other businesses.
These tax benefits are not confined to such a narrow field.
As long as a company is subject to corporation tax, it can be considered for R&D tax savings.
The government runs two schemes – SME and Large Company. For a general overview visit http://bit.ly/1QlUz7x
There are many things within the day-to-day operation of a business which could come under the heading of R&D.
The key word here is ‘development’.
We’ve been involved with significant claims for companies saving corporation tax and also producing back-dated claims in order to generate cash repayments, sometimes up to six figures.
So what costs can qualify?
• Staff costs
• Consumables
• Subcontractor payments
• Overheads
Example R&D Sectors:
• Manufacturing
• Architecture
• Engineering and electronics
• Injection moulding
• Software
• Offshore
• Life sciences
Has your accountant not mentioned this?
This relief is not automatically given by HM Revenue & Customs who recommend that a technical report is submitted in order to support the relief claimed.
Often, accountancy firms don’t have the expertise in-house to identify and maximise the tax reliefs.
They either rely on the client or bring in external specialists who know the rules but don’t have that in depth knowledge of the client’s business. In my view the latter is essential to a strong, long-term business relationship.
My advice? Don’t be afraid to ask questions about R&D around your business. You might be surprised by the outcome.
Mike Lloyd is the managing partner of Haines Watts Swindon – http://www.hwca.com/accountants-swindon/
