Top Tips on R&D Tax Credits and Capital Allowances

R&D tax credits:

1. If you have not already claimed R&D tax credits but have eligible spend you could be entitled to a tax rebate against corporation tax already paid.
2. If you already claim R&D tax relief but are currently loss making you could be in line for a cash credit from HMRC.
3. You can apply for a cash advance secured against the expected cash payment, providing a valuable short-term injection of funds
4. For businesses that have re-purposed to produce something to support the fight against Covid-19 – Make UK’s partner, ABGI UK Ltd will assess your project to identify if you are eligible for R&D tax relief and, if eligible, will prepare your claim for free.

Capital Allowances

1. Capital allowances can give you tax relief on money invested in capital assets over the life of the assets, either as a relief against a future tax bill, OR a tax refund against tax previously paid.
2. A company spending £250,000 on fixtures & fittings could receive £47,500 tax relief over the life of the assets (at a standard corporation tax rate of 19%)
3. By amending a prior year’s tax return the company could obtain a relief or a refund from HMRC equal to the allowances claimed in that period.
4. Capital allowances is not only available to limited companies. Sole traders can also benefit from capital allowances relief.