Covid-19 (Coronavirus): An Update on R&D Tax Credits
As we embark on the second phase of ‘lockdown’, everyone is being faced with the fact that the unknown is the new reality.
The impact from Covid-19 is being felt across the entire business community, with the virus showing zero prejudice for company size or sector. During this crisis, as a business you already know the importance of assessing all possible avenues of funding and support.
HMRC are still currently processing R&D tax credit claims within the target of 28 days and we are experiencing no delays in clients receiving the cash they are entitled to. RDEC claims can take longer to process, but this is standard practise and we have no indication that the approval process is taking any longer than normal.
This is great news for businesses. The average time taken to prepare an R&D tax credit claim is 4 weeks, however, LimestoneGrey have turned around successful claims in under 7 days. This means that if you started the process today, you could receive a healthy cash boost in your bank within 35 days.
The great benefit of the R&D tax credit relief is that the money is completely unrestricted, allowing you to choose how you spend it. This flexibility is vital during this time.
Support for Businesses
The UK government has deployed a comprehensive support plan, with the aim to facilitate longevity of UK companies and save the livelihoods of millions of hard working employees.
Details of such support can be found by following the link below.
https://www.gov.uk/coronavirus/business-support
This week the government has launched a new initiative allowing innovative companies to apply for convertible loans between £125,000 and £5 million in a bid to ease the financial difficulty created by the coronavirus outbreak, subject to at least equal match funding from private investors. These loans may be a suitable option for businesses that rely on equity investment and are unable to access the Coronavirus Business Interruption Loan Scheme. The Future Fund will be launched in May 2020, with further details being published shortly. Further information can be found here:
https://www.gov.uk/guidance/future-fund
LimestoneGrey is continuing to support businesses through this unprecedented time by helping them take advantage of R&D tax credits.
R&D tax credits can provide unrestricted working capital for qualifying companies, and with the average claim for a UK SME currently standing at £54,000, the benefits can be so instrumental at this time.
Essentially, you need to have taken part in a project that had challenges, challenges that were technically difficult to overcome at the time. You do not need to have been aiming to create something new – iterative improvements to existing products, software, processes or services equally qualify.
It is the process of R&D and the work that went into it that matters, not necessarily the outcome. You needed to invest time, effort and money to figure out solutions to these technical challenges. It doesn’t need to be a current project, it could have taken place up to three years previous.
You are able to claim back up to 33p for every £1 spent on those problem solving activities, which can amount to tens or even hundreds of thousands of pounds.
We urge companies to investigate this avenue of funding. There is no risk in finding out if you qualify, we just need half an hour of your time. The benefits could provide that much needed support you are looking for.
Limestonegrey prepares your claim on a 100% contingent basis, eliminating all financial risk for yourself. We are still able to prepare successful claims remotely using digital forms of communication.
Find Out if You Qualify
Get in touch today to book your free consultation, which can take place over the telephone or via video conferencing. Our chartered tax advisers will be able to assess your eligibility.
