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| R&D Tax Credits Available For Firms That Can Demonstrate Innovation |
| by Karim Solanj |
Her Majesty's Revenue and Customs (HMRC), the UK Tax authority, is currently paying out in the region of GPB150 million every year to companies that can show they have been innovating. HMRC has a Large Business Service for handling R&D Tax Credit claims for the very biggest public companies. All other claims, for SMEs (small and medium-sized enterprises) are handled by a network of dedicated offices across the UK. Launched in 2006, these offices are located in Manchester, Leicester, Cambridge, Cardiff, Croydon, Maidstone and Southampton. Together these offices are now handling around 5,000 claims for R&D Tax Credits each year.
The UK Government has been developing and improving this scheme since the year 2000, to encourage innovation, which in turn boosts Britain's business and therefore the UK economy as a whole. The problem is that many thousands of companies in the UK are still missing out in a big way by not claiming their R&D Tax Credit entitlement. This is due to a number of factors.
Many firms believe that R&D Tax Credits can only be claimed by big companies with dedicated R&D departments with full time research scientists and technicians. In fact, firms that have benefited from the scheme include developers of computer games and artificial intelligence programs, sports car manufacturers, cheese makers, food testers, plant breeders, and machine safety testers.
Many ordinary accountants across the UK are themselves not properly aware of the R&D Tax Credits scheme, so when asked by their client, they say they would not be eligible. In fact, the area is so complex that a new generation of specialist consultants for R&D Tax Credits have sprung up over recent years. These firms are properly clued up in all the intricacies of R&D Tax Credits, and are in the process of educating the business market place about the scheme. |
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