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Research activities bring real tax benefits

Shropshire businesses could be missing out on generous tax relief on research and development purely because they’re not aware their working practices qualify.
 
Tony Elliott, our Senior Tax Planning Consultant at Dyke Yaxley, said the relief is available to all sizes of company, with a small or medium sized business classed as those with up to 500 employees. 
 
“Many engineers and managers will have heard of research and development incentives, but they generally associate them with medical and scientific research, when in fact there are many more activities covered by the rules.”
 
Tony said there were several questions company owners should ask themselves, to decide whether they may be entitled to tax relief.
 
“Have you made any advances in science and/or technology? Do you manufacture anything? Or have you developed your own software?
 
“Does your company use existing technology in a unique way or have you developed any non-software driven processes that reduce production times or cost or improve scaleability?
 
“Maybe other companies have asked you to manufacture items to help with their projects, or do you subcontract manufacturing work out to someone else?
 
“Do you carry out any design work or have you filed any patents? These are all areas that could mean you qualify for research and development tax relief, which would be excellent news for your company.”
 
Tony said small and medium-sized companies received 225% uplift for tax purposes on any qualifying R&D expenditure, and for large companies the uplift was 130%.
 
“If a claim creates a taxable loss, the loss can be surrendered to HM Revenue and Customs for cash. And even better news, claims can be back-dated up to two years, so your company could receive a refund of tax you’ve already paid.
 
“Professional advice can help ensure you don’t overlook any activities within your working practices that qualify for the relief, so it’s always worth seeking expert help to make sure you’re not missing out.”
 
Dyke Yaxley's Tony Elliott