The secret of using innovation grants and research and development or R&D tax credits together would be through careful planning. These are not mutually exclusive, but its relationship can be complicated sometimes, which is why hiring a professional would be the best way in optimizing your future.
An R&D tax credit scheme is considered as the best way for any small companies to get big refunds on tech development. They can actually get back up on it for about 35% on the total annual spend.
Back in April 2012, the tax relief on the allowable R&D costs for the SMEs would be about 225%, which is where a certain amount for the qualifying costs the company could get the income to where the CT is paid and reduced by an additional on top of the qualifying costs. This will also include payable credit to some circumstances in a reduced rate.
You only could claim the R&D relief when the company is a concern to when it makes its claim and not on the administration or the liquidation during that time.
There actually are three kinds of Smart Grants which in fact are made available which would be the proof of market, proof of the concept and the development prototype. Which one you would want to go will depend on the stage of the firm, the finances as well as the kind of product that you plan on developing.
Companies which comes with a patentable products may reduce their CT bill through using a Patent Box scheme. This actually is somehow similar with the R&D Tax Credit scheme and is also being administered by the same people at the HMRC, but this only works for companies who are profitable consistently. This will result to halving on the CT bill.
There’s also the Seed Enterprise Investment Scheme, which is a tax break and is purposely designed in helping startups. But, this is not being targeted at companies and is targeted at investors that are new to companies. When they will invest in qualifying companies, they will be able to acquire a significant tax break for about 75% of their money back on the year which the firm started trading.
There actually are a lot of startups these days that are already launching who wanted to get an SEIS status. Professional investors tends to expect it and also disregards startups who doesn’t know if it would qualify for the SEIS. Non-professional investors can in fact easily incentivised through promises of recovering most their money instantly.