What do research and development tax credits mean for your engineering company?
While companies from any sector may claim a research and development tax, engineering is one of those areas that immediately leaps to mind. If you work in engineering, you will be aware of the role that research and development plays, not only for your company, but for the industry as a whole. From market research […]
While companies from any sector may claim a research and development tax, engineering is one of those areas that immediately leaps to mind.
If you work in engineering, you will be aware of the role that research and development plays, not only for your company, but for the industry as a whole. From market research and focus groups to blueprints and beta testing, R&D plays a pivotal part in any engineering firm. This process of idea generation is crucial to your business, and is also your way forward to receiving government assistance in the form of R&D tax relief and credits.
Since the turn of the millennium, HMRC has distributed over £14 billion in research and development tax credits to innovative companies of all different sizes, from small enterprises and start-ups to recognised brands at the forefront of their respective industries. This is because the government believes that innovation in business is conducive to job creation, which in turn benefits the national economy, assisting its growth. As such, they believe that companies that are actively in pursuit of innovation in their sector ought to be rewarded for the new products they produce or the new processes they promote in their industry.
Where does engineering come into all this?
The constant pushing of boundaries, integration of new and existing technology, optimising processes to increase efficiency – all of this is what helps engineering lead the way with new ideas.
Claiming your share of research and development tax credits
Many engineering firms fail to apply for engineering r&d tax credits from HMRC not knowing that they are eligible for it. Unfortunately this means that all innovations being developed and promoted is not considered because it is seen as part of their core job description, rather than the constant state of development that it actually is.
The value of ideas
Whether your company innovates by producing new products or by developing new processes that increase efficiency, you are eligible to apply for R&D tax credits, so long as you can meet the government’s criteria. A successful claim, regardless of the size or the history of your business, can result in tax deductions of up to 33% cash back on project costs.
Claiming R&D tax relief
Research and development tax credits are available to all, but you will be expected to provide evidence of your R&D costs and the potential gains to your company and the wider economy that will result from them. Solid investment in R&D benefits the country as a whole, so you should make the most of your innovations and claim the R&D tax credits to which you are entitled.
For more information about R&D tax credits and to start the documentation and application process, give us a call on 0161 298 1010 and speak to a member of our friendly and professional team, or pay us a visit at R&D Tax Solutions.