One of the most effective way when it comes to using innovation grants and research and development tax credits is by implementing careful planning procedures. These actually are not mutually exclusive, however its relationship can really be complicated sometimes, which in fact is the reason why hiring a professional is the best way for you to optimize on your future.
R&D tax credit schemes are considered to be the best way for any small firms to acquire big refunds with their tech development. They actually could get back up on this for about 35% on the overall annual spend.
Last April 2012, the tax relief on the allowable R&D costs on the SMEs are about 225% to where a certain amount on the qualifying costs the company could get on the income to where the CT is paid and will be reduced as an addition on top of the qualifying costs. This will also include a payable credit in some circumstance in a reduced rate.
You can actually claim the R&D relief if ever the company is a big concern to when this will make its claim and not on the administration or perhaps on the liquidation at that time.
There actually are three kinds of Smart Grants which in fact are made available which would be the proof of market, proof of the concept and the development prototype. Which of them you really want to go for will depend with the stage of the firm, the finances it have as well as the kind of product which you plan on developing.
Companies that have a patentable product could actually reduce their CT bill by using a Patent Box scheme. This actually is somehow similar with the R&D Tax Credit scheme and is also being administered by the same people at the HMRC, but this only works for companies who are profitable consistently. This will then result to halving the CT bill.
There’s also the Seed Enterprise Investment Scheme, which is a tax break and is purposely designed in helping startups. But, this is not being targeted at companies and is targeted at investors that are new to companies. If they will invest in qualifying companies, they could get a significant break to almost 75% of their money back at the year that the company started to trade.
Most of the startups that are launching today wants to acquire a SEIS status. A professional investor usually expects it and disregards startups that don’t know whether it will qualify for the SEIS. The non-professional investors could be easily incentivised through the promise of recovering most of their money easily.