With research and development more crucial than ever in a fast-moving, tech-driven world, the government has introduced significant tax incentives in recent years to encourage greater spending on the discovery and development of new ideas.
Tax credits for small and medium sized companies, in particular, are increasingly generous, and can help to offset the substantial costs of research and development.
Since the introduction of these credits Whitley Stimpson, one of the largest independent accountancy practices in the area, has helped many companies with successful claims. These range from technology businesses, right through to traditional engineering and manufacturing companies.
One such firm is Eynsham-based SST Technology, an engineering business specialising in the design and manufacture of bespoke, advanced precision fabrications and thermal management systems. With the help of Whitley Stimpson, over the last four years SST and Lentus Composites (part of the Polar Technology Management Group) achieved SME tax credit repayments, R&D Expenditure Credits and reductions in corporation tax that totalled over £1m.
Dr Scott Roberts, chairman, Polar Technology Management Group explains: “Whitley Stimpson helped advise on the group tax position – on how best to use the R&D tax relief available and also how to optimise R&D capital allowances.
By understanding our business, they highlighted many opportunities to claim R&D tax credit payments. This has enabled us to reinvest an enormous amount of cash back into our business, funding growth and working capital requirements through tax credits rather than profit.”
Ian Parker, director at Whitley Stimpson in Banbury says: “When considering whether to apply for R&D tax relief, it’s important to be aware of the rigorous terms and conditions governing a company’s eligibility for the scheme. The rules of R&D tax relief have been simplified in recent years, but there are still stringent requirements that must be met.
However, our experience of the HMRC has suggested that they are positive rather than seeking to knock back the claims, provided they are happy that there is genuine innovation and R&D occurring.”
If you are interested in exploring R&D tax relief and require more advice, please contact Ian Parker on 01295 270200 or ianp@whitleystimpson.co.uk