Tip-Top Tax Tip 3 – Could you claim R&D credits? You might be surprised

Welcome to our video series of Tip-Top Tax Tips for 2015. We’ll be giving you 5 of our top tips to cut your tax bill in the year ended 5 April 2016. In Part 3, we’ll talk through whether you could be eligible for Research & Development credits to cut your bill.

You can watch it here, or read all about it below the video.

Hi – it’s Jon Davies here with another tax saving tip for you. Today is the 3rd in our series of Tip-Top Tax Tips for 2015.

Today I want to talk about Research and Development tax credits. Now, you might think “they’re not applicable to me – I don’t have some sort of laboratory”. However, they can be relevant to a lot of businesses.

So – what actually are they? Research and Development tax credits allow you to claim additional tax relief if you have spent money on research and development. For every £1.00 you spend on R&D, you can claim £2.30 of taxable expenses in your tax return.

What that actually means in cash is that for every £1 you spend, your corporation tax bill is reduced by 46 pence, ie it only costs 54 pence of your own money to spend £1 on R&D.
The key thing is are you doing any? You may think you aren’t….. but you actually are. It doesn’t mean you have to have people in laboratories, wearing white coats. But it does mean developing something new or faster, bigger, smaller. Or different systems for doing things.

An example is in the travel industry. A business claimed R&D credits but they didn’t need to invent a plane or something. They actually just implemented a new way of taking customer bookings on their website – this was eligible for the credit and got additional tax relief.

My tip today is to have a think about it and if you’re unsure think whether something you’re doing could be something new and could be relevant for the credits……talk to an expert.
So that’s my 3rd tip-top tax tip for this year.

I hope you find it useful. I’ll be back next week with some ways to cut your tax bill when you have staff.

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Any questions?

If you’d like a meeting or a Skype call with a Liverpool accountant to discuss business tax, please give us a ring on 0151 380 3800 or drop us an email at [email protected].

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