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How R&D Tax Credits can revive a loss-making business

The loss-making phase.

It’s a challenge that all businesses have faced at one point or another.

It sometimes feels like quicksand – the harder you try to get out, the deeper you sink in.

But every cloud has a silver lining.

For innovative businesses or businesses that are conducting research and development, the UK government offers an initiative to offer financial support.

This scheme is known as R&D Tax Credits!

💡 What exactly are R&D Tax Credits?

R&D Tax Credits are available to profitable and loss-making businesses, but the latter is favoured. Loss-making companies can reclaim up to 27% of the money they spent on R&D over the past financial year.

This scheme opens the door for game-changing re-investment into the growth of your product or service, as loss-making companies receive their claim as a cash reimbursement – straight into their bank account!

This isn’t the case for profitable businesses, who can reclaim up to 21.5% of their R&D spending, in the form of a corporation tax reduction. This is still highly valuable, considering profitable businesses are already at a financial advantage.

But it is the case that loss-making R&D projects in the UK are not only offered the most financial support from R&D Tax Credits, but they’re also granted more freedom in how they allocate their benefit.

The only way that your SME could be restricted from the lucrative SME Tax Credit scheme is if your company has more than 500 employees, over €86M in gross assets, and brings in over €100M in turnover.

If your business happens to exceed these metrics it would mean filing under the RDEC R&D Tax Credit scheme, which operates at around 10.5% of research & development expenditure.

But for most – that’s a long way off.

In short, if your company is undertaking research and development, and is yet to make profit, you really should be claiming R&D Tax Relief!

The R&D term is broad, and sometimes vague. So how do you know if your business is doing research and development?

Research & development, or R&D, is defined as activities that introduce a new product, process, or service – or improve existing offerings.

💰 How do I claim R&D Tax Credits?

The claim process can be seamless, and should only get easier each year. They key is to use a trusted R&D Tax Specialist.

Our sister company, Claim Capital, provides an end-to-end R&D Tax Credit service, that takes care of your application from start to finish.

Claim Capital holds over 20 years of experience in delivering successful, maximised R&D claims.

A short, no-obligation consultation with their R&D Specialists can quickly determine your eligibility for the scheme, and estimate the size of your potential claim.

Should you wish to go ahead, Claim Capital’s specialised approach allows them to complete and submit your R&D Tax Credit claim to HMRC, within 3-5 working days of receiving sufficient information.

And unlike other R&D Advisors, Claim Capital’s service comes with no fees whatsoever, until you receive your tax benefit from HMRC. Then, and only then, they operate a cost-effective fixed fee.

🏆 We're here to help your business take-off.

We’re dedicated to spreading the word about tools such as R&D Tax Credits, because it helps our mission of empowering startups and SMEs to take advantage of the financial support available to them.

We know that the road to business success is a bumpy one.

So, when your research & development business is loss-making, don’t be disheartened!

Instead, take advantage of Claim Capital’s R&D Tax Credit service.

And if you’re not doing R&D, reach out to our experts here at Jump. There’s a chance that a financial support strategy more suited to your business is included in our Accounting packages.

At Jump Accounting, we go above and beyond traditional bookkeepers, integrating growth-focused business opportunities with the full breadth of accounting tasks.

If your Accountant isn’t going the extra mile to support the growth of your startup or SME, don't settle!

That's exactly what we're here for. 🚀


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