As we head quickly into 2018, this is a time when many businesses start to plan for their success in the year
The North East Chamber of Commerce is looking to build a future this year that attracts investments and creates new employment opportunities. They look to a future where a stronger North East is achieved by
Better funding for the region
Spending on key infrastructure projects
With Brexit negotiations now heading into the second phase, businesses of the North East (and the rest of the UK) need to be in the best position possible to make the most of the opportunities out there.
Joanne Warren, Harlands Accountants Further devolution of political powers to the area
And this aligns in many ways with the ‘Northern Powerhouse’ idea of the government to develop the areas away from London and the South East economically.
New building projects and devolution of powers are something that can have a positive impact on the companies of the North East over the long term. It delivers a more connected region, able to do business with the world. With Brexit negotiations now heading into the second phase, businesses of the North East (and the rest of the UK) need to be in the best position possible to make the most of the opportunities out there.
Cash is at the core of this
And for all of these projects, access to money is the key factor. For the big infrastructure plans, there will need to be a big pot of cash available from the government to make these happen and have the positive impact on the area that is planned.
And this reflects the way that all businesses in the region operate. Having plans for the future means needing cash in the present. Companies across the North East have made improvements to their processes, developed new products or commissioned a new piece of software over the last few years. The idea with these projects is that it makes things better for the future. Any business investing their hard-earned cash in a project is doing it to be more efficient or drive sales.
In the very same way that major projects enacted by the government are designed to improve the North East, smaller projects in individual companies are designed to improve outcomes. And this comes at a price. But the government is aware of the value of these projects, and is offering incentives to business to take these risks. But not enough businesses are claiming these incentives.
R&D tax is here to stay
R&D tax credits are the name of this government incentive that rewards businesses in the North East, and the rest of the UK, to develop their business. The phrase ‘research and development’ might conjure up images of scientists in deep underground laboratories experimenting with different chemicals, but R&D is something that many businesses carry out as a matter of course. This might be
A food manufacturer that comes up with a new flavour or product
A company that improves a process or procedure
A business that develops a new software platform
And there are many more examples of how projects can turn into R&D claims with HMRC for tens of thousands of pounds, sometimes more.
R&D tax credits is seen by the government as an integral part of their drive to make the UK economy more productive. They have been in place for years already, but the funding has been increased in the light of Brexit and the opportunity this delivers. For the businesses of the UK, this is a fantastic opportunity in itself to gather that funding from a past project, or to make R&D a part of their business going forward.
Submitting an R&D tax claim
R&D tax claims can be made to HMRC by submitting the correct forms and supporting evidence. This takes the shape of relevant accounting information and an explanation of the project. HMRC are interested in
How the project was an advance
That it overcame uncertainty
That the solution wasn’t readily available
These come together to explain why the project is eligible for a claim. There are billions of pounds in R&D tax claims made every year, and a substantial proportion of these are made by small and midsized businesses. If you have projects that you have not claimed for, then you can look back at the last two tax years as well to submit.
R&D tax is here to stay, so make the most of this opportunity to get your hands on the cash needed for your business, and develop what you do in the future. Like the capital projects called for by the North East Chamber of Commerce, this is government money that can be put to very good use.
