Are you eligible for R&D Tax Credit Loans?

R&D tax credit is a UK government initiative that is designed to encourage innovation – and reward those companies that are investing in it. R&D tax credit loans help your business’s cash flow by providing greater levels of control/access to this capital. Rather than waiting for cash to be received as part of this process, R&D tax credit loans provide an upfront advance so that this can be accessed now.

How to Claim R&D Tax Relief

R&D tax relief is claimed through the process of submitting a corporation tax return on behalf of the company at the end of the financial year. It’s possible to still make a claim up to two years after the end of the financial period that the claim relates to. Once the claim has been agreed by HMRC then the process of delivering the funds can be started.

How can you get R&D Tax Credit Loans?

Your business will need to be eligible for R&D tax credits. This type of tax relief is generally available to businesses that are carrying out innovative activities that are designed to develop new products or services – or enhance existing ones. Success with R&D tax credits requires that an activity is part of a specific project that is focused on science or technology and that its goal is to try and create an advance in knowledge or capability that resolves a current uncertainty.

Once you have done this, R&D advance funding can give you greater access to capital on an ad hoc, quarterly, or annual basis – it’s entirely up to you and what works best for your business.

Two key criteria for eligibility

● Activities that qualify. If you’re going to be successful with R&D tax credit loans then the R&D activities that your business is paying for need to be eligible for R&D tax credits. There is a long, and specific, list of the types of activities that this funding is designed to encompass. These include new process creation, research (e.g. discovering the right materials, solutions or requirements), routine analysis, improving current processes or creating an advance, developing and testing new products and prototypes, creating new services that compliment existing capabilities, testing and developing technological advances.
● Costs that qualify. The costs that will be covered by R&D tax credit loans include certain types of expenses that relate to R&D. For example, project management fees are included as well as the staffing costs of any staff that are working on the project. Other costs that qualify include outsourced or external workers – such as contractors or freelancers – the software costs of a project and the materials and utilities that the project has used. It’s worth noting that staff costs are often one of the biggest costs in R&D.

Which industries can apply for R&D Tax Credit Loans?

There is no specific industry requirement and this is not limited to obvious R&D areas like technology. In fact, businesses from any sector can – and have – successfully applied for R&D tax credit loans.

SPRK Capital: We’re here to help

R&D Tax Credit Loans make it easy to access the cash you will receive via R&D tax credits sooner, rather than later. We understand the process can be daunting, so why not reach out to us? Our trusted advisors will get you on the right track towards maximising your business’ financial efficiency.