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Rewarding Government Incentive for UK Businesses

Posted by: Simon Dodd on

Rewarding Government Incentive for UK Businesses - R&D Tax Credits

A General Look at Where a Rewarding Government Incentive Can Help Your Business Thrive

Let’s face it, there are certainly many day-to-day ‘obstacles’ that seemingly lurk in the shadows ready to try and derail your daily schedule at the worst possible moment.

But it’s not all bad. Some of these intense moments of frustration that crop up in your business can lead to opportunities that are priceless, both in terms of your personal development, but also due to the financial reward that can materialise as a result.

If you would only take action on that spark of brilliance, that brainwave you had at the time when it looked like your world was falling apart.

You had a brainwave on how you could do things another way….but only this time BETTER!

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Now I am absolutely certain that like me, most of you probably find technology a bit like Marmite…

…it’s great when it’s working, but when it’s not…..I will spare you the crass words, for which there are many!

Now a lot of business owners and directors depend on technology in one form or another for the smooth running and operation of their business.

Yes, of course there are the obvious technologies, laptops, phones, VOIP telephone systems and other office-based equipment, but what about the not so obvious technology that might not have immediately sprung to mind?

Most businesses invest at some point in websites, and there’s nothing new or ground-breaking with most websites, but there a lot of you out there who have asked your developers to make your website talk to other areas of your business.

For example, it might be that if your business carries stock, that if someone were to walk into your shop or boutique, and purchase an item that you want your stock control system to talk to your website and have the ‘quantity available’ depreciate by the number just sold in the physical, rather than digital world.

But let’s go one step further, what then if you want to automate your internal business process so that the till receipts are automatically updated on your cloud accounting software, and then even further than that, another system sends out automated newsletter emails and other marketing material at key dates and times specified by you?

I’m sure you can draw your own parallels relating to your own business here.

It’s true more often than not, technology can talk to other technology… All you need to do in most cases is build a digital bridge and if you can think of a step in your business currently requiring a human to take information from one digital asset and insert in in another, then the chances are you can automate the process which will greatly speed up efficiency and productivity.

If you can dream it, a developer can normally help build it.

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Now, if your spark of genius has never been done in that way before, and it has the effect of improving and advancing your industry and your businesses capabilities, then there is very real potential you could be owed substantial amounts of money or tax relief.

And don’t worry if the project didn’t work on the first attempt, you can claim for the costs incurred whilst striving for an advance too.


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Really? What costs?

Well depending on the developers’ relationship to your business that figure can change. If they are PAYE for the duration of the project, you can claim 100% of their wages but only 65% of the fees laid down if they are a sub-contractor.

Now, as if that wasn’t music to your ears, you may be pleased to hear that you can also claim for a portion of your businesses consumable items like heating, electric, lighting etc. whilst said person was working on seeking an advance.

There are many areas of expenditure that can be grouped together and when they are, the total amount of money you could be owed can grow exponentially.

The UK has a long and proud history of leading the world when it comes to innovation, and with Brexit on the cards, this is a trend the UK Government wants to make sure continues.

No matter what your opinion or outlook when it comes to Brexit, the fact is at present it is still happening and we now have to pull together to make the UK a stronger, leaner and more efficient version of the small little island that has changed the lives of so many people globally for the better.

It might interest you that a quarter of the world’s leading medicines were conceived and developed in the UK.

Our ability and prowess in a broad spectrum of industries so far have stood the test of time and with Brexit edging ever closer:


That hunch or gut feeling you have had on how to improve something could be a goldmine for your business if you would only act on it, even if you fail, but hopefully, you won’t!

So when a project has drawn to a close, whether successful or not, can see you recovering a substantial amount of your investment costs back from the Government.

Now, this incentive from the UK Government is the incentive that keeps giving.

When the combined pot of company investment has been identified, the Government give you another £1.30 accelerated relief for each pound identified, so the total pot of money that is a precursor to the final figure is now £2.30 for every pound laid down.

In other words, for every £100,000.00 identified, that’s a pot of £230,000.00 that will lead to a tax rebate or reduction off your next Corporation Tax bill.

The final figure you stand to receive depends on your company’s status.

If you are in profit, then as a rule of thumb, you will receive around £26,000.00 as a reduction in your next tax bill.

If you are currently operating at a loss, then you will receive an immediate tax rebate of a whopping £33,350.00 for every £100k of qualifying expenditure identified.

If you are working on business development activities that have a degree of uncertainty, or unknown outcomes attached to them, and you are working with any technologies, and working on a trial and error basis (scientific iterations) then this is a flag that your business could be owed a percentage of the costs incurred on the project.

This valuable Government incentive is better known by the name ‘Research & Development’ or ‘R&D Tax Credits’ but sadly, most businesses feel they do not qualify but if you can relate to the example above, then you will see how the word ‘Research’ can lead many business owners to missing out on their legal entitlement.

If you would like to discuss any of your recent (last two years only) business projects and where they could lead to a substantial injection of funds for your business, then feel free to contact the experts at Hamilton Wood & Co.

Alternatively, if you have not conducted any projects, but you have a fantastic idea that you need to find the funding and finance for, then please contact us also.

We are specialists at providing Limited Companies with the funding they need to do ‘that project,’ and providing the project is structured in the right way, we can also help you recover a percentage of the project back at a later date.

We are Hamilton Wood & Company. We help businesses thrive.

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Author: Simon Dodd

Simon is the Managing Director of Hamilton Wood & Company.

His interests are reading, astrology, martial arts, and siberian huskies.