R&D Tax Credits Clarification and Industrial Qualification Description
Research and Development (R&D) tax credits are the tax reliefs allowed to the most innovative enterprises, with a goal of promoting innovation levels in the economy, but, like RDP Associates explain, many of the eligible businesses have no idea they qualify for them. The number of claims submitted year after year has been on the rise for the last several years, proving the growing popularity of the R&D program.
The program works by reducing the tax bill of the innovative company by an excess of the percentage of the R&D expenditure, meaning that the costs in it are free from taxation. Even though this program is effective and cost-cutting, companies are not making maximum utilization of it because of eligibility concerns where some believe that the program is a scam, procrastination, limited resources of the company or HMRC concerns.
RDP Associates give 6 metrics that are used to measure the eligibility of a company to these reliefs and they are; whether there are patents available, whether the company has employed professionals like engineers, whether the company has experienced problems in design and development, whether there are new or improved products, whether there are new or improved services, and whether any prototypes have been developed. The following industries are in the best position of claiming this according to RDP Associates.
The software industry, as times can tell, is the biggest beneficiary of this program but they should meet some conditions where they should be able to formulate the architecture of their propose software, have their source codes, design electrical interface and relationships, determine the integration means, explain the alternate materials, formulate a proper process of waste disposal from their structure, determine the assembly means, and design a proper material and product transportation system.
The second industry is that of architecture and should meet the condition of being in a position to come up with schematic designs, design energy efficient structures, develop facades, design systems for building and have a great site plan that brings together all the other features.
The other industry that benefit from this relief, and it must also meet the conditions exercising and ability to come up with 3D solid modelling, design numeric computer based programs, come up with prototypes and design equipment and tools needed.
Lastly, the consumer packed goods and food industries should meet the conditions of being in a position to improve the current food products appearance, texture and flavor, release new packaging designs, design prototypes for microbiological and analytical qualities, and develop a new production process.
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