What are R&D tax credits and how can they help my business?

When it comes to developing your business, every little (and big) tax relief helps. By working with your accountant, you can unlock tax credits across a variety of areas to free up essential funds and push your business forward in the right direction.

One area where tax credits are widely available is in research and development (R&D). In this blog post, we take a closer look at the importance of R&D for businesses big and small, reveal more about the R&D tax credits currently available, and uncover how they can help your company.

Why R&D should matter to every business

Research and development should form an integral part of every business’ operations. By using R&D techniques within your organisation, you can tap into additional revenue streams. You’ll also enhance the work environment to turn it into the nurturing, progressive setting that it should be for employees at all levels, not to mention your shareholders and customers.

By researching your industry and developing your company’s knowledge and skills, you can actively seek out innovation to cement yourself as a major player in your market.

The R&D umbrella covers many direct and indirect activities, including research into materials and solutions; development of new products, processes, services and software; and even procedures that support research and development within the company such as maintenance, security and administration.

An introduction to R&D tax credits

Research and development is held in such high esteem that even the government are facilitating its use in businesses at all stages.

Research and development (R&D) tax credits are government backed initiatives that reward companies for their investment in innovation. To access R&D tax credits, all you have to do in spend money on the development of new products, processes, services and software, or the enhancement of existing ones.

Over time, you’ll get more R&D tax credit, with the reinvestment of funds saved giving you the chance to grow your company and receive larger R&D credit.

The types of R&D relief available

There are a number of R&D reliefs available, including the Small and Medium Sized Enterprises (SME) R&D Relief, and Research and Development Expenditure Credit (RDEC). Each scheme has differing criteria, but both provide Corporation Tax relief for the cost of research and development.

To find out more about which R&D tax reliefs you could be entitled to, use our service to find a local accountant for advice and support.