The North East of England is at the centre of a new wave of innovation. From the wind energy industry off the coast to biofuel solutions and the established motor industry in the region, there is a drive to come up with new answers to the problems facing the world.
As an area, the North East has seen the industries worked in change dramatically over the last 20 or 30 years. It has had to embrace new technologies, as old industries faded away. The North East has leaders in many areas of the new economy
– Software design and production
– Manufacturing innovative products
– New food and drink goods
– Energy solutions that lead the way
And this means we are often looking for investment to make these ideas become reality. The traditional funding route of going to the bank isn’t always the best option. This is especially so for a startup in an innovative field. There are many risks involved. Business has turned to investment from a range of other sources to help bring the latest ideas to life, such as crowdfunding. And this is great to help some businesses get off the ground.
Building a better business
Getting your funding for business is all factored in as part of the planning process. Looking ahead as a company means understanding the cash that you need-and the time that you need it. Starting a project may take money to get going, but sustaining that momentum takes more money. Without access to funds, it can be easy for a business to stall.
The long-term forecasting becomes all-important in this aspect of starting and maintaining success in a business. The spark of an idea is one thing. Making it work and bringing it to market is something else altogether. As well as a vision for the next few years and beyond, an innovative business needs the cash to make this vision work.
Getting support
There are a wide range of support mechanisms in place for an innovative tech business, ranging from networking to hiring experts to help in specific areas of operation. The advantages of leaning on the expertise of others is that it saves time and money having to acquire those skills yourself. Most innovative business owners will tell you that it can feel like there are never enough hours in the day.
There is also a government incentive for these kinds of innovative companies who take risks in trying to find fresh solutions. It is known as R&D tax credits. It was set up over a decade ago to incentivise business to find better ways of working. This can include an array of improvements, including
– Developing a new product or service
– Coming up with an improvement on an existing product or service
– Adapting to meet new regulations or legislation
– Generating a new and efficient process in your business
And there are many more reasons why you could have an eligible claim. In fact, we find that many businesses we speak to have an R&D tax claim that they didn’t even know was in their business.
Getting your paperwork in order
Submitting a claim to the tax man is all about getting your facts and figures right, as you would expect. Dealing with the HMRC is far more pleasurable when you receive money back from them. The average claim we receive on behalf of our clients is over £35,000, so you can see that this can make a substantial difference to an SME.
There are two elements to an R&D tax claim
1. The accounting part what you have spent
2. The explanation part what you have spent it on
And to have a successful claim, both of these pieces need to be in order. The explanation is the more complex part for most because it deals with the risk taken by the business and the uncertainty that the project had to overcome.
The money is back in your business in 6 to 8 weeks, if the claim is submitted correctly. This can come in the form of money off the next corporation tax bill, or straight into your bank account. This is perfect for an innovative business to sustain their work over a longer period. R&D tax claims can be submitted every year the government has backed it until 2021 at least. And if you haven’t made a claim in the last 2 tax years, then you can still get the R&D tax credits for these years as well.
