The other thing on innovation is this thing called Research and Development Tax Credits.
So I’m not to sure if many people here have heard of those.
In a nutshell, if your business is doing or carrying out activities that are
genuinely innovative, then you can apply to the Revenue to get some tax relief
based on the costs that you’re incurring in carrying out those research and development activities.
For some businesses that stuff’s quite a lot of cash that they’re putting into these things.
The government wants to encourage these countries so they’ve come up with this tax credit,
which means that if you have got a tax bill, you can use this credit to reduce it
so you pay less tax so again adding value to the business with less cash going out.
But perhaps more interestingly, if you’re at an early stage looking into R&D and you’re
you’re making losses, you can convert those losses, the R&D part of the losses, into cash and HMRC
will write you a cheque for them. So you kind of cash in those R&D losses
and kind of get your money back from revenue which is splendid really.
They’re trying to do that to drive innovation.
In our experience when people look at that, they look at R&D, they kind of think about people in white coats
in labs doing medical research, but actually that’s not the case.
It’s about innovation and technological innovation as much as it might be medical innovation.
So it’s worth having a think about whether your business is doing that,
so for example, are you developing you own software?
Is anyone developing internal processes that are completely unique at helping reduce cost
and production times?
Is anyone using two existing technologies in completely unique way bringing those things together?
Or do you carry out design work? Are you manufacturing products?
So anything like that is worth having a chat, as I say its all about innovation.
The one good example I was given is we had a client who got an R&D tax credit on a pie,
just a pie sold in shops, the reason for that is the pie had a particularly gourmet content and they had to come up
with a way of cooking this pie that meant that it was safe to eat.
It hadn’t been done before with this particular recipe and ingredients,
so they went away and they came up with this revolutionary new way of cooking pie,
but it was something completely new and it all got cleared by HMRC so they got their money back for that pie.
Eighty thousand quid, yeah it was pretty substantial, so eighty grand to figure how to bake a pie?
Yay, so I don’t want you to think you’re all going to get this, but just to illustrate that it’s worth just
thinking about what you do and what you’re doing differently
Particularly if your products or services are unique or innovative then its worth exploring.
Another thing is actually if you’ve been in business for a few years and you’re looking at this and thinking
“ah damn I think we could have done this for the stuff we’ve already filed”
you can go back and you can reopen files, depending on where you are you can go back two years
and reopen and resubmit tax returns
saying if anyone’s thinking they’ve got something there but they feel they might have missed the boat, there still might be an opportunity.