Tax Relief Claims in Fintech
The R&D tax credit scheme is an HMRC initiative, designed to encourage innovation by companies operating in the UK.
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Irrespective of the financial overall health of one's enterprise, there is constantly the wish to save just a little revenue where feasible. Possibly probably the most satisfying approaches to save a little bit cash is within the kind of tax relief - either paying significantly less in taxes or getting funds back. You will discover schemes offered that will support fintech firms do just this but several are missing out. So how do you know in case your organization is eligible?
Tiny company relief rate
A single modify that comes into force this April could be the adjust for the small business relief price that was announced by then Chancellor George Osborne back inside the 2016 Spending budget. This relief, referred to as the SBRR, was doubled from 50% to 100% last April.
Alongside the price getting raised, the threshold was raised from £6000 to £15,000 for the decrease rate and from £18,000 to £51,000 for the typical rate. The outcome of this can imply some 6,000 small businesses will be paying no tax and yet another 250,000 will see their tax bill reduce.
R&D Tax Credit
Probably the biggest tax relief obtainable to enterprises that are getting underutilised is definitely the Research and Development Tax Credit. This scheme was set up back in 2000 by the government to encourage research and development across the country by giving a substantial tax relief to qualifying project costs.
The HMRC R&D Tax Credit scheme currently has two tiers - tiny and medium enterprises (SMEs) and large corporations. For SMEs, the amount of credit they can receive for the work that they are doing is 230% from the costs. So, for every £100 spent on R&D that qualifies under the scheme, the corporation can claim back that £100 plus an additional £130.
SMEs are qualified as companies with significantly less than 500 employees and an annual turnover of significantly less than £100 million or a balance sheet of much less than £86 million. Corporations that fall outside this definition are classed large firms and can claim up to 130% of qualifying costs, as long as they spend more than £10,000 a year on research and development.
Does your work qualify?
A lot of fintech firms think their work doesn’t qualify but the very nature of your ‘tech’ side on the organization means they are potentially on the list of qualifying projects. Among the list of main criteria for qualifying projects is that they are in the area of either science or technology. This means the development of new technologies or the advancement of existing tech can both qualify under the scheme as long as they meet the other criteria.
The project does need to be inside the area that the business operates in - so a fintech company likely wouldn’t start working on a revolutionary new recipe organising software! But if the project is a clearly defined one particular with aims and processes and is inside the area that the company works in, then there is certainly a good chance that it can qualify. The people working on the project also have to be qualified for the task, not simply slotted in to fill out the numbers.
What can you claim for?
The other main question is what can corporations claim for in regards to this R&D project? The main thing is definitely the cost of salary for any members of staff working on the project. If they work 50% of their time on the project and 50% of their time on something else, then only the half spent on the project would qualify. Under the same definition, you can claim for materials used inside the project, power and other utilities consumed for the project and even the cost of software or hardware purchased solely for the purpose of your research project.
Why businesses are missing out
On the surface, this might seem like a specialist tax relief that doesn’t really apply to a fintech firm and this is why several corporations are missing out. Yet within the year 2013-14, there were over 16,000 claims under the scheme and the payments totalled some £800 million. So how do you understand in case your organization can qualify?
One of several easiest ways is to engage the services of a organization such as Easy RnD to assess the research and development work your firm is doing and see if it qualifies under the scheme. As experts within the field, the company can quickly look at what qualifies and what costs you can claim for, even processing the claim. Many of their clients receive a tax relief settlement in as little as six weeks.
You will need some basic information about the projects that might qualify under the scheme for them to carry out the claim. Questions such as ‘how do I find a corporation registration number’ can also be answered by them to aid you prepare for your claim. And within a short time, you can know if you are due the relief and can be saving funds for your organization.
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Datum: 27.04.2017 - 11:03 Uhr
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