Gov’t Cashback Not Just During Coronavirus
A bespoke arts and crafts business has received £170k cashback from the government over the past 6 years.
Many businesses will have been looking to take advantage of any government grants or loans available during the Coronavirus. However, an annual cashback for innovative businesses has been available for the last 20 years and has the advantage of being a means of funding that doesn’t have to be paid back.
Rob Sowden, innovation tax incentives consultant operating from Bournemouth, provides the following example: “this family owned business has received £170k cashback over the past 6 years via the government’s Research & Development (R&D) tax credits scheme, an average of £28k a year. They manufacture materials for the arts and crafts DIY market and this is not in a traditional sector that would be associated with R&D. This case highlights that a business in any sector that is involved in any form of unique innovation that incurs costs via the payroll or external labour, can benefit from this very generous scheme.
Many businesses have missed this incredible funding support from the government because they have tried to self-assess their eligibility or the opportunity may never have been raised by their accountant. It is not primarily an accounting workstream, it is about technology and identifying anything in the production of a product, or processes used, that requires iterative steps to get to an outcome, whether successful or not. The claims provider I introduced this business to assigned a technical analyst to assess what the client does and to compile a robust report for submission to HMRC. The company’s accountant receives copies of the reports and submits them to HMRC for a very rapid annual cashback.
If trading revenues have been lower during the pandemic, the great thing with this scheme is it allows a business to recoup a percentage of costs they incurred for the prior two years, providing an unexpected lump sum that is not taxed again and goes straight to the bottom line. A business doesn’t even have to be profitable or have paid corporation tax to qualify for a cashback. That puzzles many business owner/directors, but it is true.
My advice to businesses is, don’t try and guess if you are eligible, obtain a free eligibility assessment based on a technical appraisal. Be aware that if your accountant offers to do the claim, they will likely ask you to produce the technical report. Have you got time to read and interpret correctly the legislation? Even if you have received benefit under the scheme, get it checked out as to whether you have received maximum entitlement as you can claim any shortfall for the past two years, but there is a two year deadline, so year-end dates are critical.”
Business Cash Enabler provides a free service to businesses to check eligibility for innovation tax incentives.
For more information visit: www.businesscashenabler.co.uk or call Rob Sowden on 07732 627085