Cash for innovators
We're here to help innovators get back government money for the amazing work they do. We are also here to put half our profits into social impact projects. Our aim is to help small businesses become great big ones. You get money back and you have the comfort of knowing your fees go towards great social projects to help even more small businesses. Win win.
R&D tax relief is a big deal for small businesses (and bigger ones too through the RDEC Scheme). In fact, they're undoubtedly the single biggest funding mechanism for those investing in innovative projects. Unfortunately “R&D tax credits” or "R&D tax relief" are not only uninspiring names, they're also a really poor description of the scheme. This means thousands of small companies are missing out even though the government wants to give this cash away. So we like to describe it more simply as cash for innovators.
To see if you're eligible for R&D tax relief, take the Babbage Test now. It takes less than a minute and if you pass, give us a ring and we’ll explain what to do next. We’re friendly and we won’t stalk you ever after with sales calls or spammy emails.
If you decide to go ahead you’ll have to provide some financial information and we also need to talk to someone involved in your innovation project. Other than that we pretty much do all the work for you. Once our report has been submitted to HMRC and meets all the criteria, you should receive the cash (or tax benefit) in 4 to 8 weeks.
If you prefer your accountant to have a bash or want to do it yourself, download our "Definitive Guide to R&D Tax Relief" here. It explains in detail how the scheme works and what you need to do to claim this money for your company.
Do I qualify?
You don’t want to be like Charles Babbage, the “father of the computer”. He did all that amazing development work on the first ever computer, only to run out of money in the final straight and see his innovation gather dust in the back room. Perhaps even worse than that, you could see your innovation go to market without the right budget to really make a splash. It doesn't have to be like this. 21,865 companies got an average £61,514 in R&D tax cash through the SME Scheme for their innovation work in 2016. Why weren't you one of them?
Do I qualify?A bit more detail
The tax credit scheme rewards companies doing self-funded R&D work and it doesn’t matter whether you're in profit or in loss - it almost always ends up as a nice cash payment.
There are a few criteria you need to check. Your innovative project needs to be “an advance in overall knowledge or capability”. Something that your competitors would like to get their hands on. Something that solves a problem in your industry.
You need to have found a “resolution of a scientific or technological uncertainty”. In other words, you might have known that you could solve this particular problem at some point, but not how. If it failed along the way and you had to try different ways to overcome teething problems or design glitches, that’s classed as technological uncertainty.
But you need to make sure your developments are scientific and technical, not aesthetic. We often use a car analogy to explain what we mean; you need to be designing something new or different to go underneath the bonnet, rather than simply making the headlights look funkier. In software terms, you need to be focusing on the back end not the front end.
You also need to have incurred costs directly related to the innovation project. In general we can claim around 25% of these back (the range for the SME Scheme is 13% to 33%, but most of our clients get back 25%). Usually these are salary payments to staff, or to subcontractors and companies you have paid to work on the project. Costs to buy materials for prototypes can be counted too. Try our cashback calculator to get a feel for what you might be able to claim. Just note that if a company has commissioned you to do the innovation project you probably can’t claim under this scheme, but contact us to check, as there are other ways we may be able to help you.
We’re so used to the taxman taking money that it’s hard to imagine there are pots of it waiting for companies to claim. But the truth of it is, there are. The government wants to boost the technology sector and the economy in general. This is one initiative to do just that, and there are very similar schemes all over Europe and in other countries such as Australia and Canada. If it all sounds too good to be true, have a look at the full details of the R&D tax relief scheme for SMEs by downloading our "Definitive Guide to R&D Tax Credits" here. You can also go to the R&D tax credit .gov website here. If you employ more than 500 people then check out the RDEC Scheme.